# EUR-Lex - 52013PC0290 - EN

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# 52013PC0290

**PROPOSAL FOR A COUNCIL DECISION on the conclusion of the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part /* COM/2013/0290 final - 2013/0151 NLE */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT
OF THE PROPOSAL/BACKGROUND

The attached proposal
constitutes the legal instrument for authorising the conclusion of the
Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part .

The Commission proposal
for the Council approval of the parts of the Agreement which fall under the
Treaty establishing the European Atomic Energy Community will be made
separately.

Relations between the
EU and Ukraine are currently based on the Partnership and Co-operation
Agreement which entered into force in 1998. At the 13th EU-Ukraine
Summit in Paris in 2008, the leaders of the EU and Ukraine agreed that the
Partnership and Co-operation Agreement should be succeeded by an Association
Agreement.

The EU-Ukraine
Association Agreement is the first of a new generation of Association
Agreements with Eastern Partnership countries. Negotiations of this comprehensive and ambitious Agreement
between the EU and Ukraine were launched in March 2007. In February 2008,
following the decision of accession of Ukraine to the WTO, the EU and Ukraine launched negotiations on a Deep and Comprehensive Free Trade Area (DCFTA) as a core
element of the Association Agreement.

The Association
Agreement aims to accelerate the deepening of political and economic relations
between Ukraine and the EU, as well as Ukraine's gradual access to parts of the
EU Internal Market including by setting up a DCFTA. It is a concrete way to
exploit the dynamics in EU-Ukraine relations, focusing on support to core
reforms, on economic recovery and growth, governance and sector co-operation.
The Agreement also constitutes a reform agenda for Ukraine, based on a
comprehensive programme of approximation of Ukraine’s legislation to EU norms,
around which all partners of Ukraine can align themselves and focus their
assistance. EU assistance to Ukraine is linked with the reform agenda as it
emerges from the Agreement. The Comprehensive Institutional Building Programme
is particularly important in this regard.

At the 15th Ukraine-EU
Summit of 19 December 2011, the EU and the President of Ukraine noted that a
common understanding on the text of the Association Agreement was reached. On
30 March 2012, the chief negotiators of the European Union and Ukraine initialled the text of the Association Agreement. The trade negotiators from both
sides initialled the DCFTA part of the Agreement on 19 July 2012.

On 10 December 2012,
the Foreign Affairs Council adopted Conclusions on Ukraine, expressing the EU's
commitment to the signing of the Association Agreement, including a DCFTA, as
soon as the Ukrainian authorities demonstrate determined action and tangible
progress in the three areas (Elections, selective justice, and overall reforms
as set out in the Association Agenda), possibly by the time of the Eastern
Partnership Summit in Vilnius in November 2013. The Council also indicated that
the signature of the Agreement could be accompanied by opening for provisional
application of parts of the Agreement. The provisional application is foreseen
in view of keeping mutual economic
interests and shared values in equilibrium, and the common will of the EU and Ukraine to start implementing
and enforcing various parts of the Agreement in order to advance an early
reform impact on sector specific issues before the conclusion of the Agreement.

As requested by the 10
December Council Conclusions, the
High Representative and the Commission are monitoring and keeping the Council
informed about progress achieved by Ukraine in meeting the requirements set out
by the Council conclusions, including in the context of the preparations of the
June 2013 EU-Ukraine Cooperation Council and November 2013 Eastern Partnership
Summit in Vilnius.

2.           RESULTS
OF THE NEGOTIATIONS

Member States have been
regularly informed and consulted in the relevant Council Working Groups,
notably in COEST and Trade Policy Committee (TPC), at all stages of the
negotiations. The Commission considers that the objectives set by the Council
in its negotiating directives were attained and that the draft Association
Agreement is acceptable to the Union.

The final content of
the Association Agreement can be summarised as follows:

The Agreement establishes
an association between the Union and its Member States of the one part and Ukraine of the other part. This constitutes a new stage in the development of EU-Ukraine
contractual relations, aiming at political association and economic integration
and leaving open the way for further progressive developments.

The overall aims of the
association focus on promoting a gradual rapprochement between the parties on
the basis of common values; providing enhanced political dialogue; promoting,
preserving and strengthening peace and stability in both the regional and
international dimensions; establishing conditions for enhanced economic and
trade relations leading towards Ukraine's gradual access to parts of the EU
Internal Market; enhancing Justice, Freedom and Security (JFS) cooperation with
the aim of reinforcing the rule of law and respect for human rights and
fundamental freedoms, and establishing conditions for increasingly close
co-operation in other areas of mutual interest.

General Principles of
the Agreement include a specific set of "essential elements", the
violation of which by one of the Parties could give rise to specific measures
under the Agreement, including the suspension of rights and obligations. These
elements are respect for democratic principles, human rights and fundamental
freedoms as defined in relevant international instruments; respect for the rule
of law; promotion of respect for sovereignty and territorial integrity,
inviolability and independence; and countering the proliferation of weapons of
mass destruction, related materials and means of delivery.

Other General
Principles of the Agreement relate to the principles of a free market economy,
good governance, the fight against corruption, the fight against trans-national
organized crime and terrorism, the promotion of sustainable development and
effective multilateralism.

The Agreement sets out
the aims of an enhanced and strengthened political dialogue promoting gradual
convergence on foreign and security matters with the aim of Ukraine's ever
deeper involvement in the European security area. The Agreement establishes a
number of fora for the conduct of political dialogue, and provides for dialogue
and co-operation on domestic reform based on the common principles set out by
the Parties. There are also provisions for intensified dialogue on foreign and
security policy, including CSDP, for the promotion of peace and international
justice by ratifying and implementing the Rome Statute of the International
Criminal Court, and for joint efforts on regional stability, conflict
prevention, crisis management, military/technological co-operation,
anti-terrorism, anti-proliferation and disarmament and arms control.

In the field of JFS,
the Agreement pays particular attention to the rule of law and to the
reinforcement of judicial institutions and practices. The Agreement sets out
the framework for co-operation on migration, asylum and border management, on
personal data protection, money laundering and terrorism financing and on
anti-drugs policy. This Title contains provisions on movement of persons,
including on readmission, on visa facilitation and on the gradual steps towards
a visa-free regime in due course (provided that relevant conditions for
well-managed and secure mobility are in place). Treatment and mobility of
workers are also covered, as is a commitment to further development of judicial
co-operation in civil and criminal matters - making full use of relevant
international and bilateral instruments.

The Association
Agreement foresees a wide range of sector cooperation, focusing on support to
core reforms, economic recovery and growth, governance and sector co-operation
in more than 30 areas, such as: energy, transport, environment protection,
industrial and small and medium enterprise cooperation, social development and
protection, equal rights, consumer protection, education, training and youth as
well as cultural cooperation. In all of these areas, enhanced co-operation
starts from the basis of current frameworks, both bilateral and multilateral,
with the aim of more systematic dialogue and exchange of information and good
practice. Key to the sectoral co-operation chapters is a comprehensive menu of
regulatory approximation set out in annexes to the Agreement. Specific
schedules for transposition and implementation by Ukraine of selected parts of
the EU acquis will provide a focus for on-going co-operation, and will form the
core of Ukraine's domestic reform and modernization agenda.

The Agreement includes
an updated institutional framework encompassing co-operation and dialogue fora
from the Summit level down the level of technical subcommittees. Specific
decision-making roles are foreseen for an Association Council, and by
delegation for an Association Committee, which may also meet in a specific
configuration to address trade issues. Fora for civil society, notably the
representative organisations for social partners, trade-unions and employers,
and parliamentary co-operation are also foreseen. The Agreement also includes
provisions on monitoring, fulfilment of obligations and dispute settlement
(including separate provisions for trade-related issues).

Closer economic integration through the DCFTA
will be a powerful stimulant to the country's economic growth. Approximation of
  Ukraine to EU legislation, norms and standards, will be the method. As a core
element of the Association Agreement, the DCFTA will create business
opportunities in both the EU and Ukraine and will promote real economic
modernization and integration with the EU. Higher standards of products, better
services to citizens, and above all Ukraine’s readiness to compete effectively
in international markets should be the result of this process.

3.           LEGAL
ELEMENTS OF THE PROPOSAL

On the part of the Union, the legal basis for the
conclusion of this Agreement is Article 217, in conjunction with Article 218(6)(a) and the second
subparagraph of Article 218(8), as well as Article 218(7) of TFEU.

The attached proposal constitutes the legal instrument for
the conclusion of the Association Agreement.

In light of the above-mentioned results - and provided that
the Ukrainian authorities
demonstrate determined action and tangible progress in the three areas
identified by the 10 December 2012 Council Conclusions on Ukraine – the
Commission proposes that the Council conclude the Agreement on behalf of the
European Union after having received the consent of the European Parliament.

The fact that the
Commission has submitted its proposal as an agreement of the Union and its Member States and Ukraine is related to the genesis of this agreement under the rules of the
Treaty before the entry into force of the Treaty of Lisbon.

2013/0151 (NLE)

Proposal for a

COUNCIL DECISION

on the conclusion of the Association
Agreement between the European Union and its Member States, of the one part,
and Ukraine, of the other part

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the
Treaty on the Functioning of the European Union, and in particular Article(s)
217, in conjunction with Article 218(6)(a) and the second subparagraph of
Article 218(8) thereof, as well as Article 218(7) thereof,

Having regard to the
proposal from the European Commission[1],

Having regard to the
consent of the European Parliament[2],

Whereas:

(1)       On
22 January 2007 the Council authorised the Commission
to open negotiations with Ukraine for
the conclusion of a new Agreement between the European Union and Ukraine to replace the Partnership and Cooperation Agreement.

(2)       These negotiations were
successfully finalised and the Association Agreement between the European Union
and its Member States and Ukraine (hereinafter referred to as the “Agreement”)
was initialled in 2012.

(3)       In accordance with Council
Decision [number of Decision] of [date][3], the
Association Agreement between the European Union and its Member States, of the
one part, and Ukraine, of the other part was signed at [place] on [date],
subject to its conclusion at a later date.

(4)       Pursuant to Article 218(7)
of the Treaty on the Functioning of the European Union, it is appropriate for
the Council to authorise the Commission to approve modifications to be adopted
by the Association Committee in its Trade configuration pursuant to Article 465(4)
of the Agreement, as proposed by the Sub-Committee on Geographical Indications
pursuant to Article 211 of the Agreement.

(5)       It is appropriate to set
out the relevant procedures for the protection of geographical indications
which are given protection pursuant to the Agreement.

(6)       The Agreement shall not be
construed as conferring rights or imposing obligations which can be directly
invoked before Union or Member State courts and tribunals.

(7)       The Association Agreement
should be approved on behalf of the European Union.

HAS ADOPTED THIS DECISION:

Article 1

The Association Agreement between the European Union
and its Member States, of the one part, and Ukraine, of the other part,
together with the Annexes and Protocols attached thereto, is hereby approved.

Article 2

The President of the
Council shall designate the person empowered to proceed, on behalf of the
European Union, to notify the Depository of the Agreement provided in Article
486(2) of the Agreement, in order to express the consent of the European Union
to be bound by the Agreement.

Article 3

For the purposes of
Article 211of the Agreement, modifications of the Agreement through decisions of
the Sub-Committee on Geographical Indications shall be approved by the
Commission on behalf of the European Union. Where interested parties cannot
reach agreement following objections relating to a geographical indication, the
Commission shall adopt such a position on the basis of the procedure laid down
in Article 57(2) of Regulation (EU) No 1151/2012 of the European Parliament and
of the Council of 21 November 2012 on quality schemes for agricultural products
and foodstuffs[4].

Article 4

1. A name protected
under Sub-section 3 “Geographical Indications” of Chapter 9 of Title IV of the
Agreement may be used by any operator marketing agricultural products,
foodstuffs, wines, aromatised wines or spirits conforming to the corresponding
specification.

2. In accordance with
Article 207 of the Agreement, the Member States and the institutions of the
European Union shall enforce the protection provided for in Articles 204 to 206
of the Agreement, including at the request of an interested party.

Article 5

The Agreement shall not be
construed as conferring rights or imposing obligations which can be directly
invoked before Union or Member State courts and tribunals.

Article 6

This Decision shall enter into force on [date][5].

Done at Brussels,

For
the Council

The
President

[1]               OJ L , , p. .

[2]               OJ L , , p. .

[3]               OJ L , , p. .

[4]               OJ L 343 14.12.2012, p.1

[5]               The date of entry into force of the Agreement will be
published in the Official Journal of the European Union by the General
Secretariat of the Council.

ANNEX

Association Agreement between the European
Union and its Member States, of the one part, and Ukraine, of the other part
ANNEX I
to the
PROPOSAL FOR A COUNCIL DECISION
on the conclusion of the Association Agreement between the European Union and
its Member States, of the one part, and Ukraine, of the other part

ASSOCIATION
AGREEMENT

BETWEEN THE EUROPEAN UNION AND ITS MEMBER
STATES, OF THE ONE PART, AND UKRAINE, OF THE OTHER PART

PREAMBLE

PREAMBLE

THE KINGDOM OF BELGIUM,

THE REPUBLIC OF BULGARIA,

THE CZECH REPUBLIC,

THE KINGDOM OF DENMARK,

THE FEDERAL REPUBLIC OF GERMANY,

THE REPUBLIC OF ESTONIA,

IRELAND,

THE HELLENIC REPUBLIC,

THE KINGDOM OF SPAIN,

THE FRENCH REPUBLIC,

THE ITALIAN REPUBLIC,

THE REPUBLIC OF CYPRUS,

THE REPUBLIC OF LATVIA,

THE REPUBLIC OF LITHUANIA,

THE GRAND DUCHY OF LUXEMBOURG,

HUNGARY,

THE REPUBLIC OF MALTA,

THE KINGDOM OF THE NETHERLANDS,

THE REPUBLIC OF AUSTRIA,

THE REPUBLIC OF POLAND,

THE PORTUGUESE REPUBLIC,

ROMANIA,

THE REPUBLIC OF SLOVENIA,

THE SLOVAK REPUBLIC,

THE REPUBLIC OF FINLAND,

THE KINGDOM OF SWEDEN,

THE UNITED KINGDOM OF GREAT BRITAIN AND
NORTHERN IRELAND,

Contracting Parties to the Treaty on
European Union and the Treaty on the Functioning of the European Union,
hereinafter referred to as the ‘Member States’,

THE
EUROPEAN UNION, hereinafter referred to as ‘the Union’ or
‘the EU’ and

THE EUROPEAN ATOMIC ENERGY COMMUNITY,
hereinafter referred to as ‘the EURATOM’

on the one part, and

UKRAINE

on the other part,

Hereafter jointly referred to as ‘the
Parties’,

–
Taking account of the close historical relationship and progressively closer links
between the Parties as well as their desire to strengthen and widen
relations in an ambitious and innovative way;

–
Committed to a close and lasting relationship that is based on common values,
namely respect for democratic principles, rule of law, good governance, human
rights and fundamental freedoms, including the rights of persons belonging to
national minorities, non-discrimination of persons belonging to minorities and respect
for diversity, human dignity and commitment to the principles of a free market
economy, which would facilitate the participation of Ukraine in European
policies;

–
RECOGNISING that Ukraine as a European country
shares a common history and common values with the Member States of the
European Union (EU) and is committed to promoting those values;

–
NOTING the importance Ukraine attaches to its
European identity;

–
TAKING INTO ACCOUNT the strong public support in
Ukraine for the country’s European choice;

–
CONFIRMING that the European Union acknowledges
the European aspirations of Ukraine and welcomes its European choice, including
its commitment to build deep and sustainable democracy and a market economy;

–
RECOGNISING that the common values on which the
European Union is built – namely democracy, respect for human rights and
fundamental freedoms, and rule of law – are also essential elements of this
Agreement;

–
ACKNOWLEDGING that the political association and
economic integration of Ukraine with the European Union will depend on progress
in the implementation of the current Agreement as well as Ukraine’s track
record in ensuring respect for common values, and progress in achieving convergence
with the EU in political, economic and legal areas;

–
Committed to implementing all the principles and provisions of the United
Nations Charter, the Organization for Security and Cooperation in Europe
(OSCE), in particular the Helsinki Final Act of 1975 of the Conference on
Security and Cooperation in Europe, the concluding documents of the Madrid and
Vienna Conferences of 1991 and 1992 respectively, the Charter of Paris for a
New Europe of 1990, the United Nations Universal Declaration on Human Rights of
1948 and the Council of Europe Convention for the Protection of Human Rights
and Fundamental Freedoms of 1950;

–
Desirous of strengthening international peace and security as well as
engaging in effective multilateralism and the peaceful settlement of disputes,
notably by closely cooperating to that end within the framework of the United
Nations (UN), the OSCE and the Council of Europe (CoE);

–
committed to promoting the independence, sovereignty, territorial integrity
and inviolability of borders;

–
desirous of achieving an ever closer convergence of positions on bilateral,
regional and international issues of mutual interest, taking into account the
Common Foreign and Security Policy (CFSP) of the European Union, including the
Common Security and Defence Policy (CSDP);

–
Committed to reaffirming the international obligations of the Parties, to
fighting against the proliferation of weapons of mass destruction and their
means of delivery, and to cooperating on disarmament and arms control;

–
Desirous of moving forward the reform and approximation process in Ukraine, thus
contributing to gradual economic integration and deepening of political
association;

–
coNVINCED of the need for Ukraine to implement the political, socio-economic,
legal and institutional reforms necessary to effectively implement this
Agreement and committed to decisively supporting those reforms in Ukraine;

–
desirous of achieving economic integration, inter alia through a Deep
and Comprehensive Free Trade Area (DCFTA) as an integral part of this Agreement,
in compliance with rights and obligations arising out of the World Trade
Organisation (WTO) membership of the Parties, including through extensive
regulatory approximation;

–
RECOGNISING that such a Deep and Comprehensive
Free Trade Area, linked to the broader process of legislative approximation,
shall contribute to further economic integration with the European Union
Internal Market as envisaged in this Agreement;

–
committed to developing a new climate conducive to economic relations between
the Parties, and above all for the development of trade and investment and
stimulating competition, factors which are crucial to economic restructuring
and modernisation;

–
COMMITTED to enhancing energy cooperation,
building on the commitment of the Parties to implement the Energy Community Treaty;

–
COMMITTED to enhancing energy security,
facilitating the development of appropriate infrastructure and increasing
market integration and regulatory approximation towards key elements of the EU
acquis, promoting energy efficiency and the use of renewable energy
sources as well as achieving a high level of nuclear safety and security;

–
COMMITTED to increasing dialogue – based on the
fundamental principles of solidarity, mutual trust, joint responsibility and
partnership – and cooperation on migration, asylum and border management, with
a comprehensive approach paying attention to legal migration and to cooperating
in tackling illegal immigration, and trafficking in human beings, and ensuring the
efficient implementation of the readmission agreement;

–
RECOGNISING the importance of the introduction
of a visa-free travel regime for the citizens of Ukraine in due course,
provided that the conditions for well-managed and secure mobility are in place;

–
COMMITTED to combating organised crime and money
laundering, to reducing the supply of and demand for illicit drugs and to
stepping up cooperation in the fight against terrorism;

–
COMMITTED to enhancing cooperation in the field
of environmental protection and to the principles of sustainable development
and green economy;

–
DESIROUS of enhancing people-to-people contacts;

–
COMMITTED to promoting cross-border and
inter-regional cooperation;

–
COMMITTED to gradually approximating Ukraine’s
legislation with that of the Union along the lines set out in this Agreement
and to effectively implementing it;

–
TAKING INTO ACCOUNT that this Agreement shall
not prejudice and leaves open future developments in EU-Ukraine relations;

–
CONFIRMING
that the provisions of this Agreement that fall within the scope of Part III,
Title V of the Treaty on the Functioning of the
European Union bind the United Kingdom and
Ireland as separate Contracting Parties, and not as part of the European
Union, unless the European Union together with the United Kingdom and/or
Ireland jointly notify Ukraine that the United Kingdom or Ireland is bound as
part of the European Union in accordance with Protocol No. 21 on the position
of the United Kingdom and Ireland in respect of the area of Freedom,
Security and Justice annexed to the Treaty on the Functioning of
the European Union. If the United Kingdom
and/or Ireland ceases to be bound as part of the European Union in accordance
with Article 4a of Protocol No. 21 or in accordance with Article 10 of Protocol No. 36
on transitional provisions annexed to the
Treaties, the European
Union together with the United Kingdom and/or Ireland shall immediately inform
Ukraine of any change in their position, in which case they shall remain bound
by the provisions of the Agreement in their own right. The same applies
to Denmark, in accordance with Protocol No. 22 on the position of Denmark,
annexed to the Treaties.

HAVE AGREED AS FOLLOWS

Article 1

Objectives

1.           An Association between the
Union and its Member States of the one part and Ukraine of the other part is
hereby established.

2.           The aims of this
Association are:

(a)
to promote gradual rapprochement between the
Parties based on common values and close and privileged links, and increasing
Ukraine's association with EU policies and participation in programmes
and agencies;

(b)
to provide an appropriate framework for enhanced
political dialogue in all areas of mutual interest;

(c)
to promote, preserve and strengthen peace and
stability in the regional and international dimensions in accordance with the
principles of the United Nations Charter, and of the Helsinki Final Act of 1975
of the Conference on Security and Cooperation in Europe and the objectives of
the Charter of Paris for a New Europe of 1990;

(d)
to establish conditions for enhanced economic
and trade relations leading towards Ukraine's gradual integration in the EU
Internal Market, including by setting up a Deep and Comprehensive Free Trade
Area as stipulated in Title IV (Trade and Trade-related Matters) of this
Agreement, and to support Ukrainian efforts to complete the transition into a
functioning market economy also through the progressive approximation of its
legislation to that of the Union;

(e)
to enhance cooperation in the field of Justice,
Freedom and Security with the aim of reinforcing the rule of law and respect
for human rights and fundamental freedoms;

(f)
to establish conditions for increasingly close
cooperation in other areas of mutual interest.

TITLE I

GENERAL PRINCIPLES

TITLE I

GENERAL PRINCIPLES

Article 2

Respect for democratic principles, human
rights and fundamental freedoms, as defined in particular in the Helsinki Final
Act of 1975 of the Conference on Security and Cooperation in Europe and the
Charter of Paris for a New Europe of 1990, and other relevant human rights
instruments, among them the UN Universal Declaration of Human Rights and the
European Convention on Human Rights and Fundamental Freedoms, and respect for
the principle of the rule of law shall form the basis of the domestic and
external policies of the Parties and constitute essential elements of this
Agreement. Promotion of respect for the principles of sovereignty and
territorial integrity, inviolability of borders and independence, as well as
countering the proliferation of weapons of mass destruction, related materials
and their means of delivery also constitute essential elements of this
Agreement.

Article 3

The Parties recognise that the principles
of a free market economy underpin their relationship. Rule of law, good
governance, the fight against corruption, the fight against the different forms
of trans-national organised crime and terrorism, the promotion of sustainable
development and effective multilateralism are central to enhancing the
relationship between the Parties.

TITLE II

POLITICAL DIALOGUE AND REFORM, POLITICAL ASSOCIATION,
COOPERATION AND CONVERGENCE IN THE FIELD OF FOREIGN AND SECURITY POLICY

TITLE II

POLITICAL DIALOGUE AND REFORM, POLITICAL ASSOCIATION,
COOPERATION AND CONVERGENCE IN THE FIELD OF FOREIGN AND SECURITY POLICY

Article 4

Aims
of political dialogue

1.           Political dialogue in all
areas of mutual interest shall be further developed and strengthened between
the Parties. This will promote gradual convergence on foreign and security
matters with the aim of Ukraine’s ever deeper involvement in the European
security area.

2.           The aims of political
dialogue shall be:

(a)
to deepen political association and increase
political and security policy convergence and effectiveness;

(b)
to promote international stability and security
based on effective multilateralism;

(c)
to strengthen cooperation and dialogue between
the Parties on international security and crisis management, notably in order
to address global and regional challenges and key threats;

(d)
to foster result-oriented and practical
cooperation between the Parties for achieving peace, security and stability on
the European continent;

(e)
to strengthen respect for democratic principles,
the rule of law and good governance, human rights and fundamental freedoms,
including the rights of persons belonging to national minorities,
non-discrimination of persons belonging to minorities and respect for
diversity, and to contribute to consolidating domestic political reforms;

(f)
to develop dialogue and to deepen cooperation
between the Parties in the field of security and defence;

(g)
to promote the principles of independence,
sovereignty, territorial integrity and inviolability of borders.

Article 5

Fora
for the conduct of political dialogue

1.           The Parties shall hold
regular political dialogue meetings at Summit level.

2.           At ministerial level,
political dialogue shall take place within the Association Council
referred to in Article 460 of this Agreement and within the framework of
regular meetings between representatives of the Parties at Foreign Minister
level by mutual agreement.

3.           Political dialogue shall
also take place in the following formats:

(a)
regular meetings at Political Directors,
Political and Security Committee and expert level, including on specific
regions and issues, between representatives of the European Union on the one
hand, and representatives of Ukraine on the other;

(b)
taking full and timely advantage of all
diplomatic and military channels between the Parties, including appropriate
contacts in third countries and within the United Nations, the OSCE and other
international fora;

(c)
regular meetings both at the level of high
officials and of experts of the military institutions of the Parties;

(d)
any other means, including expert-level
meetings, which would contribute to improving and consolidating this dialogue.

4.           Other procedures and
mechanisms for political dialogue, including extraordinary consultations shall
be set up by the Parties by mutual agreement.

5.           Political dialogue at
parliamentary level shall take place within the framework of the Parliamentary
Association Committee referred to in Article 467 of this Agreement.

Article 6

Dialogue
and cooperation on domestic reform

The Parties shall cooperate in order to
ensure that their internal policies are based on principles common to the
Parties, in particular stability and effectiveness of democratic institutions
and the rule of law, and on respect for human rights and fundamental freedoms,
in particular as referred to in Article 14 of this Agreement.

Article 7

Foreign
and security policy

1.           The Parties shall
intensify their dialogue and cooperation and promote gradual convergence in the
area of foreign and security policy, including the Common Security and Defence
Policy (CSDP), and shall address in particular issues of conflict prevention
and crisis management, regional stability, disarmament, non-proliferation, arms
control and arms export control as well as enhanced mutually beneficial
dialogue in the field of space. Cooperation will be based on common values and
mutual interests, and shall aim at increasing policy convergence and
effectiveness, and promoting joint policy planning. To this end, the Parties
shall make use of bilateral, international and regional fora.

2.           Ukraine, the EU and the
Member States reaffirm their commitment to the principles of respect for
independence, sovereignty, territorial integrity and inviolability of borders,
as established in the UN Charter and the Helsinki Final Act of 1975 of the
Conference on Security and Cooperation in Europe, and to promoting these
principles in bilateral and multilateral relations.

3.           The Parties shall address
in a timely and coherent manner the challenges to these principles at all
appropriate levels of the political dialogue envisaged by this Agreement,
including ministerial level.

Article 8

International
Criminal Court

The Parties shall cooperate in promoting
peace and international justice by ratifying and implementing the Rome Statute
of the International Criminal Court (ICC) of 1998 and its related instruments.

Article 9

Regional
stability

1.           The Parties shall
intensify their joint efforts to promote stability, security and democratic
development in their common neighbourhood, and in particular to work together
for the peaceful settlement of regional conflicts.

2.           These efforts shall follow
commonly shared principles for maintaining international peace and security as
established by the UN Charter, the Helsinki Final Act of 1975 of the Conference
on Security and Cooperation in Europe and other relevant multilateral documents.

Article 10

Conflict
prevention, crisis management and military-technological cooperation

1.           The Parties shall enhance
practical cooperation in conflict prevention and crisis management, in
particular with a view to
increased participation of Ukraine in EU-led civilian and military crisis
management operations as well as relevant exercises and training activities, including
those carried out in the framework of the Common Security and Defence Policy
(CSDP).

2.           Cooperation in this field
will be based on modalities and arrangements between the EU and Ukraine on consultation and cooperation on
crisis management.

3.           The Parties shall explore
the potential of military-technological cooperation. Ukraine and the European
Defence Agency (EDA) will establish close contacts to discuss military
capability improvement, including technological issues.

Article 11

Non-proliferation
of weapons of mass destruction

1.           The Parties consider that
the proliferation of weapons of mass destruction, related materials and their
means of delivery, to both state and non-state actors, represents one of the
most serious threats to international stability and security. The Parties
therefore agree to cooperate and to contribute to countering the proliferation
of weapons of mass destruction, related materials and their means of delivery
through full compliance with and national implementation of their existing
obligations under international disarmament and non-proliferation treaties and
agreements and other relevant international obligations. The Parties agree that
this provision constitutes an essential element of this Agreement.

2.           The Parties furthermore
agree to cooperate and to contribute to countering the proliferation of weapons
of mass destruction, related materials and their means of delivery by:

(a)
taking steps to sign, ratify or accede to, as
appropriate, and fully implement all other relevant international instruments;

(b)
further improving the system of national export
controls, in order to control effectively the export as well as transit of
goods related to weapons of mass destruction, including an end-use control on
dual use technologies and goods, as well as effective sanctions for violations
of export controls.

3.           The Parties agree to
establish a regular political dialogue that will accompany and
consolidate these elements.

Article 12

Disarmament,
arms controls, arms export control and fight against illicit trafficking
of arms

The Parties shall develop further
cooperation on disarmament, including in the reduction of their stockpiles
of redundant small arms, and light weapons as well as dealing with the impact
on the population and the environment caused by abandoned and unexploded
ordnance as referred to in Chapter 6 (Environment) of this Agreement.
Cooperation on disarmament shall also include arms controls, arms export
controls and the fight against illicit trafficking of arms, including small
arms and light weapons. The Parties shall promote universal adherence to and
compliance with relevant international instruments and shall aim to ensure
their effectiveness, including through implementation of the relevant United
Nations Security Council Resolutions.

Article 13

Combating
terrorism

The Parties agree to work together at
bilateral, regional and international levels to prevent and combat terrorism in
accordance with international law, international human rights standards, and
refugee and humanitarian law.

TITLE III

JUSTICE, FREEDOM AND SECURITY

TITLE III

JUSTICE, FREEDOM AND SECURITY

Article 14

Rule of law and respect for human rights and fundamental freedoms

In their cooperation on justice, freedom
and security, the Parties shall attach particular importance to the
consolidation of the rule of law and the reinforcement of institutions at all
levels in the areas of administration in general and law enforcement and the
administration of justice in particular. Cooperation will notably aim at
strengthening the judiciary, improving its efficiency, safeguarding its
independence and impartiality, and combating corruption. Respect for human
rights and fundamental freedoms will guide all cooperation on justice, freedom
and security.

Article 15

Protection
of personal data

The Parties agree to cooperate in order to
ensure an adequate level of protection of personal data in accordance with the
highest European and international standards, including the relevant Council of
Europe instruments. Cooperation on personal data protection may include, inter
alia, exchange of information and experts.

Article 16

Cooperation
on migration, asylum and border management

1.           The Parties reaffirm the
importance of joint management of migration flows between their territories and
shall further develop the comprehensive dialogue on all migration-related
issues, including illegal migration, legal migration, smuggling of and
trafficking in human beings, as well as the inclusion of migration concerns in
the national strategies for economic and social development of the areas from
which migrants originate. This dialogue is based on the fundamental principles
of solidarity, mutual trust, joint responsibility and partnership.

2.           In accordance with the relevant Union and national
legislation in force, cooperation will, in particular, focus on:

(a)
tackling the root causes of migration, pursuing
actively the possibilities of cooperation in this field with third countries
and in international fora;

(b)
establishing together an effective and
preventive policy against illegal migration, smuggling of migrants and
trafficking in human beings including how to combat networks of smugglers and
traffickers and how to protect the victims of such trafficking;

(c)
establishing a comprehensive dialogue on asylum
issues and in particular on matters related to the practical implementation of
the UN Convention of 1951 relating to the Status of Refugees and the Protocol relating
to the Status of Refugees of 1967 and other relevant international instruments,
as well as ensuring the respect of the principle of ‘non-refoulement’;

(d)
admission rules, and rights and status of
persons admitted, fair treatment and integration of lawfully residing
non-nationals;

(e)
further developing operational measures in the
field of border management;

(i)      Cooperation on border management may
include, inter alia, training, exchange of best practices including
technological aspects, exchange of information in line with applicable rules
and, where appropriate, exchange of liaison officers.

(ii)      Efforts of the Parties in this field
will aim at the effective implementation of the principle of integrated border
management.

(f)
enhancing of document security;

(g)
developing an
effective return policy, including in its regional dimension;

(h)
exchanging views on informal employment of
migrants.

Article 17

Treatment
of workers

1.           Subject to the laws,
conditions and procedures applicable in each Member State and the EU, treatment
accorded to workers who are Ukrainian nationals and who are legally employed in
the territory of a Member State shall be free of any discrimination based on
nationality, as regards working conditions, remuneration or dismissal, compared
to the nationals of that Member State.

2.           Ukraine shall, subject to
the laws, conditions and procedures in Ukraine, accord the treatment referred
to in paragraph 1 of this Article to workers who are nationals of a Member
State and who are legally employed in its territory.

Article 18

Mobility
of workers

1.           Taking into account the
labour market situation in the Member States, subject to the legislation and in
compliance with the rules in force in the Member States and the EU in the area
of mobility of workers:

(a)
the existing facilities of access to employment
for Ukrainian workers accorded by Member States under bilateral agreements
should be preserved and if possible improved;

(b)
other Member States shall examine the
possibility of concluding similar agreements.

2.           The Association Council
shall examine the granting of other more favourable provisions in additional
areas, including facilities for access to professional training, in accordance
with laws, conditions and procedures in force in the Member States and in the
EU, and taking into account the labour market situation in the Member States
and in the EU.

Article 19

Movement
of persons

1.           The Parties will ensure the full implementation of:

(a)
the Agreement between the European Community and
Ukraine on the Readmission of Persons of 18 June 2007, (through the joint
readmission committee set up by its Article 15);

(b)
the Agreement between the European Community and
Ukraine on the Facilitation of the Issuance of Visas of 18 June 2007, (through
the joint committee for management of the agreement set up by its Article 12).

2.           The Parties shall also
endeavour to enhance mobility of citizens and to make further progress on the
visa dialogue.

3.           The Parties shall take
gradual steps towards a visa-free regime in due course provided that the
conditions for well-managed and secure mobility, set out in the two-phase
Action Plan on Visa Liberalization presented at the EU-Ukraine Summit of 22
November 2010, are in place.

Article 20

Money
laundering and terrorism financing

The Parties shall work together in order to prevent and combat money
laundering and terrorism financing. To this end the Parties shall enhance
bilateral and international cooperation in this field, including at operational
level. The Parties shall ensure implementation of relevant international
standards, in particular those of the Financial Action Task Force (FATF) and
standards equivalent to those adopted by the Union.

Article 21

Cooperation
on the fight against illicit drugs, and on precursors and psychotropic
substances

1.           The Parties shall
cooperate on issues related to illicit drugs, on the basis of commonly agreed
principles along the lines of the relevant international conventions, and
taking into account the Political Declaration and the Special Declaration on
the guiding principles of drug demand reduction, approved by the Twentieth
United Nations General Assembly Special Session on Drugs in June 1998.

2.           This cooperation shall be
aimed at combating illicit drugs, reducing the supply of, trafficking in and demand
for illicit drugs, and coping with the health and social consequences of drug
abuse as well as at a more effective prevention of diversion of chemical
precursors used for the illicit manufacture of narcotic drugs and psychotropic
substances.

3.           The Parties shall use the
necessary methods of cooperation to attain these objectives, ensuring a
balanced and integrated approach towards the issues at stake.

Article 22

Fight
against crime and corruption

1.           The Parties shall
cooperate on combating and preventing criminal and illegal activities,
organised or otherwise.

2.           This cooperation shall
address, inter alia:

(a)
smuggling of and trafficking in human beings as
well as firearms and illicit drugs;

(b)
trafficking in goods;

(c)
economic crimes including in the field of
taxation;

(d)
corruption, both in the private and public
sector;

(e)
forgery of documents;

(f)
cyber crime.

3.           The Parties shall enhance
bilateral, regional and international cooperation in this field, including
cooperation that involves Europol. The Parties shall further develop their
cooperation as regards, inter alia,

(a)
exchange of best practices, including on
investigation techniques and crime research;

(b)
exchange of information in line with applicable
rules;

(c)
capacity building, including training and where
appropriate staff exchanges;

(d)
issues relating to the protection of witnesses
and victims.

4.           The Parties are committed
to implementing effectively the UN Convention against Transnational Organised
Crime of 2000 and its three Protocols, the UN Convention against Corruption of
2003 and other relevant international instruments.

Article 23

Cooperation
in fighting terrorism

1.           The Parties agree to
cooperate in the prevention and suppression of acts of terrorism in accordance
with international law, international human rights law, refugee law and
humanitarian law, and the respective laws and regulations of the Parties. In
particular the Parties agree to cooperate on the basis of the full
implementation of Resolution No. 1373 of the UN Security Council of 2001, the
United Nations Global Counter- Terrorism Strategy of 2006 and other relevant UN
instruments, and applicable international conventions and instruments.

2.           They shall do so in
particular:

(a)
by exchanging information on terrorist groups
and their support networks;

(b)
by exchanging experiences and information on
terrorism trends and with regard to means and methods of combating terrorism
including in technical areas and training, and

(c)
by exchanging experience in respect of terrorism
prevention.

All exchanges of information will take
place in accordance with international and national law.

Article 24

Legal
cooperation

1.           The Parties agree to further develop judicial
cooperation in civil and criminal matters, making full use of the relevant
international and bilateral instruments and based on the principles of legal
certainty and the right to a fair trial.

2.           The Parties agree to
facilitate further EU-Ukraine judicial cooperation in civil matters on the
basis of the applicable multilateral legal instruments, especially the
Conventions of the Hague Conference on Private International Law in the field
of international Legal Cooperation and Litigation as well as the Protection of
Children.

3.           As regards judicial
cooperation in criminal matters, the Parties will seek to enhance arrangements
on mutual legal assistance and extradition. This would include, where
appropriate, accession to, and implementation of, the relevant international
instruments of the United Nations and the Council of Europe, as well as the
Rome Statute of the International Criminal Court of 1998 as referred to in
Article 8 of this Agreement, and closer cooperation with Eurojust.

TITLE IV

TRADE AND TRADE-RELATED MATTERS

TITLE IV 
TRADE AND TRADE-RELATED MATTERS

CHAPTER 1

National Treatment and Market Access for Goods

Section 1

Common Provisions

Article 25

Objective

The Parties
shall progressively establish a free trade area over a transitional period of
10 years maximum starting from the entry into force of this Agreement[1], in accordance with the
provisions of this Agreement and in conformity with Article XXIV of the General
Agreement on Tariffs and Trade 1994 (hereinafter referred to as "GATT
1994").

Article 26

Scope and coverage

1.           The provisions of this
Chapter shall apply to trade in goods[2]
originating in the territories of the Parties.

2.           For the purposes of this
Chapter, ‘originating’ means qualifying under the rules of origin set out in Protocol
1 to this Agreement (Concerning the Definition of the Concept ‘Originating
Products’ and Methods of Administrative Cooperation).

Section 2

Elimination of Customs Duties, Fees
and Other Charges

Article 27

Definition of customs duties

For the
purposes of this Chapter, a ‘customs duty’ includes any duty or charge of any
kind imposed on or in connection with the importation or exportation of a good,
including any form of surtax or surcharge imposed on or in connection with such
importation or exportation. A ‘customs duty’ does not include any:

(a)          charge equivalent to an internal
tax imposed consistently with Article 32 of this Agreement;

(b)          duties imposed consistently with
Chapter 2 (Trade Remedies) of Title IV of this Agreement;

(c)          fees or other charges imposed
consistently with Article 33 of this Agreement.

Article 28

Classification of goods

The
classification of goods in trade between the Parties shall be that set out in
each Party's respective tariff nomenclature in conformity with the Harmonised
System of the International Convention on the Harmonised Commodity Description
and Coding System of 1983 (hereinafter referred to as the “HS”) and subsequent
amendments.

Article 29

Elimination of customs duties on
imports

1.           Each Party shall reduce or
eliminate customs duties on originating goods of the other Party in accordance
with the Schedules set out in Annex I-A to this Agreement (hereinafter referred
to as the ‘Schedules’).

For worn clothing and other worn articles
falling within the Ukrainian customs code 6309 00 00 Ukraine
will eliminate customs duties on imports in accordance with the conditions set
out in Annex I-B to this Agreement.

2.           For each good, the base
rate of customs duties to which the successive reductions are to be applied
under paragraph 1 of this Article, shall be that specified in Annex I to this
Agreement.

3.           If, at any moment
following the date of entry into force of this Agreement, a Party reduces its
applied most-favoured-nation (hereinafter referred to as ‘MFN’) customs duty
rate, such duty rate shall apply as base rate if and for as long as it is lower
than the customs duty rate calculated in accordance with that Party’s Schedule.

4.           Five years after the entry
into force of this Agreement, at the request of either Party, the Parties shall
consult to consider accelerating and broadening the scope of the elimination of
customs duties on trade between the Parties. A decision of the Association
Committee meeting in Trade configuration as set out in Article 465 of this
Agreement (hereinafter referred to also as the "Trade Committee") on
the acceleration or elimination of a customs duty on a good shall supersede any
duty rate or staging category determined pursuant to their Schedules for that
good.

Article 30

Standstill

Neither Party
may increase any existing customs duty, or adopt any new customs duty, on a
good originating in the territory of the other Party. This shall not preclude
that either Party may:

(a)          raise a customs duty to the level
established in its Schedule following a unilateral reduction; or

(b)          maintain or increasing a customs
duty as authorised by the Dispute Settlement Body (hereinafter
referred to as the "DSB") of the World Trade
Organization (hereinafter referred to as the "WTO").

Article 31

Customs duties on exports

1.           Parties shall not
institute or maintain any customs duties, taxes or other measures having an
equivalent effect imposed on, or in connection with, the exportation of goods
to the territory of each other.

2.           Existing customs duties or
measures having equivalent effect applied by Ukraine, as listed in Annex I-D to
this Agreement, shall be phased out over a transitional period in accordance
with the Schedule included in Annex I-D to this Agreement. In the case of an
update to the Ukrainian customs code, commitments made under the Schedule in
Annex I-D to this Agreement shall remain in force based on correspondence of
description of the goods. Ukraine may introduce safeguard measures for export
duties as set out in Annex I-D to this Agreement. Such safeguard measures shall
expire at the end of the period specified for that good in Annex I-D to this
Agreement.

Article 32

Export subsidies and measures of equivalent effect

1.           For the purposes of this
Article, “export subsidies” shall have the meaning assigned to that term in
Article 1(e) of the Agreement on Agriculture, contained in Annex 1A to the WTO
Agreement (hereinafter referred to as the "Agreement on
Agriculture"), including any amendment of that Article of that Agreement
on Agriculture.

2.           Upon entry into force of
this Agreement, no Party shall maintain, introduce or reintroduce export subsidies
or other measures with equivalent effect on agricultural goods destined for the
territory of the other Party.

Article 33

Fees and other charges

Each Party
shall ensure, in accordance with Article VIII of GATT 1994 and its
interpretative notes, that all fees and charges of whatever nature other than
customs duties or other measures referred to in Article 27 of this Agreement,
imposed on or in connection with the importation or exportation of goods are
limited in amount to the approximate cost of services rendered and do not
represent an indirect protection to domestic goods or taxation of imports or
exports for fiscal purposes.

Section 3

Non-Tariff Measures

Article 34

National treatment

Each Party
shall accord national treatment to the goods of the other Party in accordance
with Article III of GATT 1994, including its interpretative notes. To this end,
Article III of GATT 1994 and its interpretative notes are incorporated into and
made an integral part of this Agreement.

Article 35

Import and export restrictions

No Party shall
adopt or maintain any prohibition or restriction or any measure having an
equivalent effect on the importation of any good of the other Party or on the
exportation or sale for export of any good destined for the territory of the
other Party, except as otherwise provided in this Agreement or in accordance
with Article XI of GATT 1994 and its interpretative notes. To this end, Article
XI of GATT 1994 and its interpretative notes are incorporated into and made an
integral part of this Agreement.

Section 4

Specific Provisions Related to Goods

Article 36

General exceptions

Nothing in this
Agreement shall be construed in such a way as to prevent the adoption or
enforcement by any Party of measures in accordance with Articles XX and XXI of
GATT 1994 and its interpretative notes, which are hereby incorporated into and
made an integral part of this Agreement.

Section 5

Administrative Cooperation and Coordination with Other Countries

Article 37

Special provisions on administrative cooperation

1.           The Parties agree that
administrative cooperation is essential for the implementation and control of
the preferential treatment granted under this Chapter and underline their
commitment to combating irregularities and fraud in customs matters related to
the import, export, and transit of goods and their placement under any other
customs regime or procedure, including measures of prohibition, restriction and
control.

2.           Where a Party, on the
basis of objective documented information, experiences a failure by the other
Party to provide administrative cooperation and/or verify the existence of
irregularities or fraud under this Chapter, the Party concerned may temporarily
suspend the relevant preferential treatment of the product(s) concerned in
accordance with this Article.

3.           For the purposes of this
Article failure to provide administrative cooperation in investigating
customs irregularities or fraud shall mean, inter
alia:

(a)     repeated failure to respect the
obligations to verify the originating status of the product(s) concerned;

(b)     a repeated refusal or undue delay in
carrying out and/or communicating the results of subsequent verification of the
proof of origin;

(c)     a repeated refusal or undue delay in
obtaining authorisation to conduct administrative co-operation missions to
verify the authenticity of documents or accuracy of information relevant to the
granting of the preferential treatment in question.

For the purposes of this Article, a finding of
irregularities or fraud may be made, inter alia, where there is a rapid
increase, without satisfactory explanation, in imports of goods exceeding the
usual level of production and export capacity of the other Party that is linked
to objective information concerning irregularities or fraud.

4.           The application of a
temporary suspension shall be subject to the following conditions:

(a)     The Party which has, on the basis of
objective information, made a finding of failure to provide administrative
cooperation and/or of irregularities or fraud stemming from the other Party
shall without undue delay notify the Trade Committee of its finding together
with the objective information and enter into consultations within the Trade
Committee, on the basis of all relevant information and objective findings, with
a view to reaching a solution acceptable to both Parties. During the period of
consultations referred to above the product(s) concerned shall enjoy the
preferential treatment.

(b)     Where the Parties have entered into
consultations within the Trade Committee as mentioned above and have failed to
agree on an acceptable solution within three months after the first meeting of
the Trade Committee, the Party concerned may temporarily suspend the relevant
preferential treatment of the product(s) concerned. Such temporary suspension
shall be notified to the Trade Committee without undue delay.

(c)     Temporary suspensions under this
Article shall be limited to what is necessary to protect the financial
interests of the Party concerned. They shall not exceed a period of six months,
which may be renewed. Temporary suspensions shall be notified immediately after
their adoption to the Trade Committee. They shall be subject to periodic
consultations within the Trade Committee in particular with a view to their
termination as soon as the conditions for their application are no longer
given.

5.           At the same time as the
notification to the Trade Committee under paragraph 4(a) of this Article, the
Party concerned should publish a notice to importers in its sources of official
information. The notice to importers should indicate for the product concerned
that there is a finding, on the basis of objective information, of a failure to
provide administrative cooperation and/or of irregularities or fraud.

Article 38

Management
of administrative errors

In the event of error by the competent
authorities in the proper management of the preferential system at export, and
in particular in the application of the provisions of the Protocol to this Agreement
concerning the definition of originating products and methods of administrative
cooperation, where this error leads to consequences in terms of import duties,
the Party facing such consequences may request the Trade Committee to examine
the possibilities of adopting all appropriate measures with a view to resolving
the situation.

Article 39

Agreements
with other countries

1.           This Agreement shall not
preclude the maintenance or establishment of customs unions, free trade areas
or arrangements for frontier traffic except insofar as they conflict with trade
arrangements provided for in this Agreement.

2.           Consultations between the
Parties shall take place within the Trade Committee concerning agreements
establishing customs unions, free trade areas or arrangements for frontier
traffic and, where requested, on other major issues related to their respective
trade policies with third countries. In particular in the event of a third
country acceding to the European Union, such consultations shall take place in
order to ensure that account will be taken of the mutual interests of the EU
Party and Ukraine as stated in this Agreement.

CHAPTER 2

Trade
Remedies

Section
1

Global
Safeguard Measures

Article 40

General provisions

1.           The Parties confirm their
rights and obligations under Article XIX of GATT 1994 and the Agreement on
Safeguards contained in Annex 1A to the WTO Agreement (hereinafter referred to
as the "Agreement on Safeguards").The EU Party retains its rights and
obligations under Article 5 of the Agreement on Agriculture, contained in Annex
1A to the WTO Agreement (hereinafter referred to as the "Agreement on
Agriculture"), except for agricultural trade
subject to preferential treatment under this Agreement.

2.           The preferential rules of
origin established under Chapter 1 (National Treatment and Market Access for
Goods) of Title IV of this Agreement shall not apply to this Section.

Article 41

Transparency

1.           The Party initiating a
safeguard investigation shall notify the other Party of such initiation by
sending an official notification to the other Party, if the latter has a
substantial economic interest.

2.           Notwithstanding Article 40
of this Agreement, at the request of the other Party, the Party initiating a
safeguard investigation and intending to apply safeguard measures shall provide
immediately ad hoc written notification of all the pertinent information
leading to the initiation of a safeguard investigation and imposition of
safeguard measures, including where relevant, on the provisional findings and
on the final findings of the investigation as well as offer the possibility for
consultations to the other Party. This is without prejudice to Article 3.2 of
the Agreement on Safeguards.

3.           For the purposes of this
Article, a Party shall be considered as having a substantial economic interest
when it is among the five largest suppliers of the imported product during the
most recent three-year period of time, measured in terms of either absolute
volume or value.

Article 42

Application of measures

1.           When imposing safeguard
measures, the Parties shall endeavour to impose them in a way that least
affects their bilateral trade.

2.           For the purposes of
paragraph 1 of this Article, if one Party considers that the legal requirements
for the imposition of definitive safeguard measures are met, the Party intending
to apply such measures shall notify the other Party and give the possibility to
hold bilateral consultations. If no satisfactory solution has been reached
within 30 days of the notification, the importing Party may adopt the
appropriate measures to remedy the problem.

Article 43

Developing country

To the extent that Ukraine qualifies as a
developing country[3]
for the purposes of Article 9 of the Agreement on Safeguards, it will not be
subject to any safeguard measures applied by the EU Party, in so far as the
conditions provided in that Article of the Agreement on Safeguards are
fulfilled.

Section
2

Safeguard
Measures on Passenger Cars

Article 44

Safeguard measures on passenger cars

1.           Ukraine may apply a
safeguard measure in the form of a higher import duty on passenger cars
originating[4]
in the EU Party under tariff heading 8703 (hereinafter referred to as the
"product"), as defined in Article 45 of this Agreement, consistent
with the provisions of this Section, if each of the following conditions is met:

(a)     if, as a result of the reduction or
elimination of a customs duty under this Agreement, the product is being
imported into the territory of Ukraine in such increased quantities, in
absolute terms or relative to domestic production, and under such conditions as
to cause serious injury to a domestic industry producing a like product;

(b)     if the aggregate volume (in units)[5] of imports of the product in
any year exceeds the trigger level set out in its Schedule included in Annex II
to this Agreement; and

(c)     if the aggregate volume of imports of
the product into Ukraine (in units)[6]
for the last 12-month period ending not earlier than the penultimate month
before Ukraine invites the EU Party for consultations in line with paragraph 5 of
this Article below exceeds the trigger percentage set out in the Schedule of
Ukraine in Annex II of all new registrations[7]
of passenger cars in Ukraine for the same period.

2.           The duty under paragraph 1
of this Article shall not exceed the lesser of the prevailing MFN applied rate,
or the MFN applied rate of duty in effect on the day immediately preceding the
date this Agreement enters into force, or the tariff rate set out in the
Schedule of Ukraine in Annex II to this Agreement. The duty can only be applied
for the remainder of that year as defined in Annex II to this Agreement.

3.           Without prejudice to
paragraph 2 of this Article, the duties Ukraine applies under paragraph 1 of
this Article shall be set according to the Schedule of Ukraine in Annex II to
this Agreement.

4.           Any supplies of the
product in question which were en route on the basis of a contract
entered into before the additional duty is imposed under paragraphs 1 to 3 of
this Article shall be exempt from any such additional duty. However, such
supplies will be counted in the volume of imports of the product in question
during the following year for the purpose of meeting the conditions set out in
paragraph 1 of this Article for that year.

5.           Ukraine shall apply any
safeguard measure in a transparent manner. To this end, Ukraine shall, as soon
as possible, provide written notification to the EU Party of its intention to
apply such a measure and provide all the pertinent information, including the
volume (in units) of imports of the product, the total volume (in units) of
imports of passenger cars of any source and the new registrations of passenger
cars in Ukraine for the period referred to in paragraph 1 of this Article.
Ukraine shall invite the EU Party for consultations as far in advance of taking
such measure as practicable in order to discuss this information. No measure
shall be adopted for 30 days following the invitation for consultations.

6.           Ukraine may apply a
safeguard measure only following an investigation by its competent authorities
in accordance with Articles 3 and 4(2)(c) of the Agreement on Safeguards and to
this end, Articles 3 and 4(2)(c) of the Agreement on Safeguards are
incorporated into and made part of this Agreement, mutatis mutandis.
Such investigation must prove that as a result of the reduction or elimination
of a customs duty under this Agreement, the product is being imported into the
territory of Ukraine in such increased quantities, in absolute terms or
relative to domestic production, and under such conditions as to cause serious
injury to a domestic industry producing a like product.

7.           Ukraine shall immediately
notify the EU Party in writing of the initiation of an investigation as described
in paragraph 6 of this Article.

8.           During the investigation
Ukraine shall comply with the requirements of Article 4.2(a) and (b) of the
Agreement on Safeguards and to this end, Article 4.2(a) and (b) of the
Agreement on Safeguards is incorporated into and made part of this Agreement, mutatis
mutandis.

9.           The relevant factors
related to the injury determination in Article 4.2(a) of the Agreement on
Safeguards shall be evaluated for at least three consecutive periods of 12
months, i.e. a minimum of three years in total.

10.         The investigation shall
also evaluate all known factors, other than increased preferential imports
under this Agreement, that at the same time may be causing injury to the
domestic industry. Increased imports of a product originating in the EU Party
shall not be considered to be the result of the elimination or reduction of a
customs duty, if imports of the same product from other sources have increased
to a comparable extent.

11.         Ukraine shall inform the EU
Party and all other interested parties in writing of the findings and reasoned
conclusions of the investigation well in advance of the consultations referred
to in paragraph 5 of this Article with a view to reviewing the information
arising from the investigation and exchanging views on the proposed measures
during the consultations.

12.         Ukraine shall ensure that
the statistics on passenger cars that are used as evidence for such measures
are reliable, adequate and publicly accessible in a timely manner. Ukraine
shall provide without delay monthly statistics on the volume (in units) of
imports of the product, the total volume (in units) of imports of passenger
cars of any source and the new registrations of passenger cars in Ukraine.

13.         Notwithstanding paragraph 1
of this Article during the transition period, the provisions of paragraphs 1(a)
and 6 to 11 of this Article shall not apply.

14.         Ukraine shall not apply a
safeguard measure under this Section during year one. Ukraine shall not apply
or maintain any safeguard measure under this Section or continue any
investigation to that effect after year 15.

15.         The implementation and operation
of this Article may be the subject of discussion and review in the Trade
Committee.

Article 45

Definitions

For the
purposes of this Section and Annex II to this Agreement:

1.           "the product"
means only passenger cars originating in the EU Party and falling under tariff
heading 8703 in accordance with the rules of origin established in Protocol 1 to
this Agreement concerning the definition of the concept of ‘originating
products’ and methods of administrative cooperation;

2.           “serious injury” shall be
understood in accordance with Article 4.1(a) of the Agreement on Safeguards. To
this end, Article 4.1(a) is incorporated into and made part of this Agreement, mutatis
mutandis;

3.           "like product"
shall be understood to mean a product which is identical, i.e. alike in all
respects to the product under consideration, or in the absence of such a
product, another product which although not alike in all respects, has
characteristics closely resembling those of the product under consideration;

4.           “transition period” means
a 10-year period beginning on the date this Agreement enters into force. The
transition period will be extended for three more years, if before the end of
the year 10, Ukraine has presented a reasoned request to the Trade Committee
referred to in Article 465 of this Agreement and the Trade Committee has
discussed it;

5.           "year one" means
the 12-month period beginning on the date this Agreement enters into force;

6.           "year two" means
the 12-month period beginning on the first anniversary of the entry into force
of this Agreement;

7.           "year three"
means the 12-month period beginning on the second anniversary of the entry into
force of this Agreement;

8.           "year four"
means the 12-month period beginning on the third anniversary of the entry into
force of this Agreement;

9.           "year five"
means the 12-month period beginning on the fourth anniversary of the entry into
force of this Agreement;

10.         "year six" means
the 12-month period beginning on the fifth anniversary of the entry into force
of this Agreement;

11.         "year seven"
means the 12-month period beginning on the sixth anniversary of the entry into
force of this Agreement;

12.         "year eight" means
the 12-month period beginning on the seventh anniversary of the entry into
force of this Agreement;

13.         "year nine" means
the 12-month period beginning on the eighth anniversary of the entry into force
of this Agreement;

14.         "year ten" means
the 12-month period beginning on the ninth anniversary of the entry into force
of this Agreement;

15.         "year eleven"
means the 12-month period beginning on the tenth anniversary of the entry into
force of this Agreement;

16.         "year twelve"
means the 12-month period beginning on the eleventh anniversary of the entry
into force of this Agreement;

17.         "year thirteen"
means the 12-month period beginning on the twelfth anniversary of the entry
into force of this Agreement;

18.         "year fourteen"
means the 12-month period beginning on the thirteenth anniversary of the entry
into force of this Agreement;

19.         "year fifteen"
means the 12-month period beginning on the fourteenth anniversary of the entry
into force of this Agreement.

Section
3

Article 45 bis

Non-cumulation

Neither Party
may apply, with respect to the same product, at the same time:

(a)          a safeguard measure in accordance
with Section 2 (Safeguard Measures on Passenger Cars) of this Chapter; and

(b)          a measure under Article XIX of
GATT 1994 and the Agreement on Safeguards.

Section 4

Anti-dumping and Countervailing Measures

Article 46

General provisions

1.           The Parties confirm their
rights and obligations under Article VI of GATT 1994, the Agreement on
Implementation of Article VI of GATT 1994, contained in Annex 1A to the WTO
Agreement (hereinafter referred to as the "Anti-Dumping Agreement")
and the Agreement on Subsidies and Countervailing Measures, contained in Annex
1A to the WTO Agreement (hereinafter referred to as the "SCM
Agreement").

2.           The preferential rules of origin established under
Chapter 1 (National Treatment and Market Access for
Goods) of Title IV of this
Agreement shall not apply to this Section.

Article 47

Transparency

1.           The Parties agree that
anti-dumping and countervailing measures should be used in full compliance with
the requirements under the Anti-Dumping Agreement and the SCM Agreement
respectively and should be based on a fair and transparent system.

2.           After receipt by a Party's
competent authorities of a properly documented anti-dumping complaint with
respect to imports from the other Party, and no later than 15 days before
initiating an investigation, the Party shall provide written notification to
the other Party of receipt of the application.

3.           The Parties shall ensure,
immediately after the imposition of provisional measures, if any, and before
final determination is made, full and meaningful disclosure of all essential
facts and considerations which form the basis for the decision to apply
measures, without prejudice to Article 6.5 of the Anti-Dumping Agreement and
Article 12.4 of the SCM Agreement. Disclosure shall be made in writing, and
allow interested parties sufficient time to make their comments. After final
disclosure, interested parties shall be given at least 10 days to make their
comments.

4.           Provided it does not
unnecessarily delay the conduct of the investigation and in accordance with the
internal legislation concerning investigation procedures, each interested party
shall be granted the possibility to be heard in order to express their views
during anti-dumping and anti-subsidy investigations.

Article 48

Consideration of public interest

Anti-dumping or countervailing measures may not be applied by a
Party where, on the basis of the information made available during the
investigation, it can clearly be concluded that it is not in the public
interest to apply such measures. The public interest determination shall be
based on an appreciation of all the various interests taken as a whole,
including the interests of the domestic industry and of users, consumers and
importers to the extent that they have provided relevant information to the
investigating authorities.

Article 49

Lesser
duty rule

Should a
Party decide to impose a provisional or definitive anti-dumping or
countervailing duty, the amount of such duty shall not exceed the margin of
dumping or countervailable subsidies, but it should be less than the margin if
such a lesser duty would be adequate to remove the injury to the domestic
industry.

Article 50

Application of measures and reviews

1.           Provisional anti-dumping
or countervailing measures may be applied by the Parties only if a preliminary
determination has shown the existence of dumping or subsidy causing injury to a
domestic industry.

2.           Before imposing a
definitive anti-dumping or countervailing duty, the Parties shall explore the
possibility of applying constructive remedies, due consideration being given to
the special circumstances of each case. Without prejudice to the relevant
provisions of each Party’s internal legislation, the Parties should give
preference to price undertakings, to the extent that they have received
adequate offers by exporters and that the acceptance of these offers is not
considered impractical.

3.           Upon receiving a duly
substantiated request made by an exporter for a review of anti-dumping or
countervailing measures in force, the Party that has imposed the measure shall
examine such a request in an objective and expeditious manner and inform the
exporter of the results of the examination as soon as possible.

Section
5

Article 50 bis

Consultations

1.           A Party shall afford
opportunity for consultation at the request of the other Party concerning
specific issues that may arise regarding the application of trade remedies.
Those issues may concern, but are not limited to, the methodology followed to
calculate margins of dumping, including various adjustments, the use of
statistics, the development of imports, the determination of injury and the
application of the lesser duty rule.

2.           Consultations shall take
place as soon as possible and normally within 21 days of the request.

3.           Consultations under this
Section shall be held without prejudice to and in full compliance with the
provisions of Article 41 and Article 47 of this Agreement.

Section 6

Institutional
Provisions

Article 51

Dialogue
on trade remedies

1.           Parties have agreed to
establish an expert-level Dialogue on Trade Remedies as a forum for cooperation
in trade remedies matters.

2.           The Dialogue shall be
conducted with the aim to:

(a)     enhance a Party's knowledge and
understanding of the other Party's trade remedy laws, policies and practices;

(b)     examine the implementation of this
Chapter;

(c)     improve cooperation between the
Parties' authorities having responsibility for trade remedies matters;

(d)     discuss international developments in
the area of trade defence;

(e)     cooperate on any other trade remedies
matter.

3.           The Dialogue meetings
shall be held on ad hoc basis upon a request from either Party. The
agenda of each such meeting shall be jointly agreed in advance.

Section 7

Provisions on Dispute Settlement

Article 52

Provisions on dispute settlement

1.           The provisions of Sections
1, 4, 5, 6 and 7 of this Chapter shall not be subject to the Dispute Settlement
provisions of this Agreement.

2.           The provisions of Sections
2 and 3 of this Chapter shall be subject to the Dispute Settlement provisions
of this Agreement.

CHAPTER 3

Technical Barriers to Trade

Article 53

Scope
and definitions

1.           This Chapter applies to
the preparation, adoption and application of technical regulations, standards,
and conformity assessment procedures as defined in the Agreement on Technical
Barriers to Trade, contained in Annex 1A to the WTO Agreement (hereinafter
referred to as the “TBT Agreement”) that may affect trade in goods between the
Parties.

2.           Notwithstanding paragraph
1 of this Article, this Chapter does not apply to sanitary and phytosanitary
measures as defined in Annex A of the Agreement on the Application of Sanitary
and Phytosanitary Measures, contained in Annex 1A to the WTO Agreement
(hereinafter referred to as the "SPS Agreement"), nor to purchasing
specifications prepared by public authorities for their own production or
consumption requirements.

3.           For the purposes of this
Chapter, the definitions of Annex I to the TBT Agreement shall apply.

Article 54

Affirmation
of the TBT Agreement

The Parties affirm their existing rights and
obligations with respect to each other under the TBT Agreement, which is hereby
incorporated into and made part of this Agreement.

Article 55

Technical cooperation

1.           The Parties shall
strengthen their cooperation in the field of technical regulations, standards,
metrology, market surveillance, accreditation and conformity assessment
procedures with a view to increasing mutual understanding of their respective
systems and facilitating access to their respective markets. To this end, they
may establish regulatory dialogues at both horizontal and sectoral levels.

2.           In their cooperation, the
Parties shall seek to identify, develop and promote trade-facilitating
initiatives which may include, but are not limited to:

(a)     reinforcing regulatory cooperation
through the exchange of information, experiences and data, and scientific and
technical cooperation, with a view to improving the quality of their technical
regulations, standards, testing, market surveillance, certification, and
accreditation, and making efficient use of regulatory resources;

(b)     promoting and encouraging cooperation between
their respective organisations, public or private, responsible for metrology,
standardization, testing, market surveillance, certification and accreditation;

(c)     fostering the development of the
quality infrastructure for standardisation, metrology, accreditation,
conformity assessment and the market surveillance system in Ukraine;

(d)     promoting Ukrainian participation in
the work of related European organisations;

(e)     seeking solutions to trade barriers
that may arise;

(f)      coordinating their positions in
international trade and regulatory organisations such as the WTO and the United
Nations Economic Commission for Europe (hereinafter referred to as
"UN-ECE").

Article 56

Approximation of technical regulations, standards, and conformity
assessment

1.           Ukraine shall take the
necessary measures in order to gradually achieve conformity with EU technical
regulations and EU standardisation, metrology, accreditation, conformity assessment
procedures and the market surveillance system, and undertakes to follow the
principles and practices laid down in relevant EU Decisions and Regulations[8].

2.           With a view to reaching
these objectives, Ukraine shall, in line with the timetable in Annex III to
this Agreement:

(i)      incorporate the relevant EU acquis
into the legislation of Ukraine;

(ii)     make the administrative and
institutional reforms, that are necessary to implement this Agreement and the
Agreement on Conformity Assessment and Acceptance of Industrial Products
(hereinafter referred to as the "ACAA") mentioned in Article 57 of
this Agreement below;

(iii)     provide the effective and
transparent administrative system required for the implementation of this
Chapter.

3.           The timetable in Annex III
to this Agreement shall be agreed and maintained by the Parties.

4.           After this Agreement comes
into force, Ukraine shall provide the EU Party once a year with reports
on the measures taken in accordance with this Article. Where actions listed in
the timetable in Annex III to this Agreement have not been implemented within
the applicable time frame, Ukraine shall indicate a new timetable for the
completion of such actions.

5.           Ukraine shall refrain from
amending its horizontal and sectoral legislation listed in Annex III to this
Agreement, except in order to align such legislation progressively with the
corresponding EU acquis, and to maintain such alignment.

6.           Ukraine shall notify the
EU Party of any such changes in its national legislation.

7.           Ukraine shall ensure that its
relevant national bodies participate fully in the European and international
organisations for standardisation, legal and fundamental metrology, and conformity
assessment including accreditation in accordance with its area of activity and
the membership status available to it.

8.           Ukraine shall
progressively transpose the corpus of European standards (EN) as national
standards, including the harmonised European standards, the voluntary use of
which shall be presumed to be in conformity with legislation listed in Annex
III to this Agreement. Simultaneously with such transposition, Ukraine shall
withdraw conflicting national standards, including its application of interstate
standards in Ukraine (GOST/ГОСТ), developed before
1992. In addition, Ukraine shall progressively fulfil the other conditions for
membership, in line with the requirements applicable to full members of the
European Standardization Organizations.

Article 57

Agreement on Conformity Assessment and Acceptance of Industrial
Products

1.           The Parties agree to add
an ACAA as a Protocol to this Agreement, covering one or more sectors listed in
Annex III to this Agreement once they have agreed that the relevant Ukrainian
sectoral and horizontal legislation, institutions and standards have been fully
aligned with those of the EU.

2.           The ACAA will provide that
trade between the Parties in goods in the sectors that it covers shall take
place under the same conditions as those applying to trade in such goods
between the Member States of the European Union.

3.           Following a check by the
EU Party and agreement on the state of alignment of relevant Ukrainian
technical legislation, standards and infrastructure, the ACAA shall be added as
a Protocol to this Agreement by agreement between the Parties according to the
procedure for amending this Agreement, covering such sectors from the list in
Annex III to this Agreement as are considered to be aligned. It is intended
that the ACAA will ultimately be extended to cover all the sectors listed in
Annex III to this Agreement, in accordance with the aforementioned procedure.

4.           Once the sectors on the
list have been covered by the ACAA, the Parties undertake to consider extending
its scope to cover other industrial sectors by agreement between the Parties
according to the procedure for amending this Agreement.

5.           Until a product is covered
under the ACAA, the relevant existing legislation of the Parties shall apply to
it, taking into account the provisions of the TBT Agreement.

Article
58

Marking and labelling

1.           Without prejudice to the provisions of Article 56
and Article 57 of this Agreement, with respect to technical regulations
relating to labelling or marking requirements, the Parties reaffirm
the principles of Article 2.2 of the TBT Agreement whereby such requirements are not prepared, adopted or applied with a view to or with the effect of
creating unnecessary obstacles to international trade. For this purpose, such
labelling or marking requirements shall not be more trade-restrictive than
necessary to fulfil a legitimate objective, taking account of the risks that non-fulfilment
would create.

2.           In particular, regarding
mandatory marking or labelling, the Parties agree:

(a)     that they will endeavour to minimise
their requirements for marking or labelling, except as required for the
adoption of the EU acquis in this area and for marking and labelling for
the protection of health, safety, or the environment, or for other reasonable
public policy purposes;

(b)     that a Party may determine the form of
labelling or marking, but shall not require the approval, registration or
certification of labels;

(c)     that the Parties retain the right to
require the information on a label or marks to be in a specified language.

CHAPTER 4

SANITARY
AND PHYTOSANITARY MEASURES

Article 59

Objective

1.           The objective of this
Agreement is to facilitate trade in commodities covered
by sanitary and phytosanitary measures between the
Parties, whilst safeguarding human, animal and plant life or health, by:

(a)     ensuring full transparency as regards
sanitary and phytosanitary measures applicable to trade;

(b)     approximating the Ukrainian
legislative system to that of the EU;

(c)     recognising the animal and plant
health status of the Parties and applying the principle of regionalisation;

(d)     establishing a mechanism for the
recognition of equivalence of sanitary or phytosanitary measures maintained by
a Party;

(e)     further implementing the principles of
the SPS Agreement;

(f)      establishing mechanisms and
procedures for trade facilitation; and

(g)     improving communication and
cooperation between the Parties on sanitary and phytosanitary measures.

2.           Furthermore, this
Chapter aims at reaching a common understanding between the Parties concerning
animal welfare standards.

Article 60

Multilateral
obligations

The Parties re-affirm their rights and
obligations under the SPS Agreement.

Article 61

Scope

This Chapter shall apply to all sanitary
and phytosanitary measures of a Party that may, directly or indirectly, affect
trade between the Parties, including the measures listed in Annex IV to this
Agreement.

Article 62

Definitions

For the purposes of this Chapter, the
following definitions shall apply:

1.           "sanitary and
phytosanitary measures " means measures as defined in paragraph 1 of Annex
A to the SPS Agreement, falling within the scope of this Chapter;

2.           "animals" means
terrestrial and aquatic animals as defined in the Terrestrial Animal Health
Code or the Aquatic Animal Health Code of the World Organisation for Animal
Health (hereinafter referred to as the "OIE") accordingly;

3.           "animal
products" means products of animal origin including aquatic animal
products, as defined in the Terrestrial Animal Health Code and the Aquatic
Animal Health Code of the OIE;

4.           "animal by-products
not intended for human consumption" means animal products as listed in
Annex IV-A, Part 2 (II) to this Agreement;

5.           "plants" means
living plants and specified living parts thereof, including seeds:

(a)     fruits, in the botanical sense, other
than those preserved by deep freezing;

(b)     vegetables, other than those preserved
by deep freezing;

(c)     tubers, corms, bulbs, rhizomes;

(d)     cut flowers;

(e)     branches with foliage;

(f)      cut trees retaining foliage;

(g)     plant tissue cultures;

(h)     leaves, foliage;

(i)      live pollen; and

(j)      bud-wood, cuttings, scions.

6.           "plant products"
means products of plant origin, unprocessed or having undergone simple
preparation in so far as these are not plants, set out in Annex IV-A, Part 3 to
this Agreement;

7.           "seeds" means
seeds in the botanical sense, intended for planting;

8.           "pests (harmful
organisms)" means any species, strain or biotype of plant, animal or
pathogenic agent injurious to plants or plant products;

9.           "protected
zones" mean, in the case of the EU Party, zones within meaning of Article
2(1)(h) of Council Directive 2000/29/EC of 8 May 2000 on protective measures
against the introduction into Community of organisms harmful to plants or plant
products and against their spread within the Community or any successor
provision (hereinafter referred to as "Directive 2000/29/EC");

10.         "animal disease"
means a clinical or pathological manifestation of an infection in animals;

11.         "aquaculture
disease" means clinical or non-clinical infection with one or more of the
aetiological agents of the diseases referred to in the Aquatic Animal Health
Code of the OIE;

12.         "infection in
animals" means the situation where animals maintain an infectious agent
with or without presence of clinical or pathological manifestation of an
infection;

13.         "animal welfare
standards" means standards for the protection of animals as developed and
applied by the Parties and, as appropriate, in line with the OIE standards and
falling within the scope of this Agreement;

14.         "appropriate level of
sanitary and phytosanitary protection” means the appropriate level of sanitary
and phytosanitary protection as defined in paragraph 5 of Annex A to the SPS
Agreement;

15.         "region" means,
as regards animal health, zones or regions as defined in the Terrestrial Animal
Health Code of the OIE, and for aquaculture as defined in the International Aquatic
and Animal Health Code of the OIE, on the understanding that as regards the
territory of the EU Party its specificity shall be taken into account,
recognising the EU Party as an entity;

16.         "pest-free area"
means an area in which a specific pest does not occur
as demonstrated by scientific evidence and in which, where appropriate, this
condition is being officially maintained;

17.         "regionalisation"
means the concept of regionalisation as described in Article 6 of the SPS
Agreement;

18.         "consignment"
means a quantity of animal products of the same type, covered by the same
certificate or document, conveyed by the same means of transport, consigned by
a single consignor and originating in the same exporting country or part of
such country. A consignment may be composed of one or more lots;

19.         "consignment of plants
or plant products" means a quantity of plants, plant products and/or other
articles being moved from one country to another and covered, when required, by
a single    phytosanitary certificate (a consignment may be composed of one or
more commodities or lots);

20.         "lot"
means a number or units of a single commodity, identifiable by its homogeneity
of composition and origin, and forming part of a consignment;

21.         "equivalence for trade
purposes" (hereinafter referred to as "equivalence") means the
situation where the importing Party shall accept the sanitary or phytosanitary
measures of the exporting Party as equivalent, even if these measures differ
from its own, if the exporting Party objectively demonstrates to the importing
Party that its measures achieve the importing Party's appropriate level of
sanitary or phytosanitary protection;

22.         "sector" means
the production and trade structure for a product or category of products in a
Party;

23.         "sub-sector"
means a well-defined and controlled part of a sector;

24.         "commodities"
means animals and plants, or categories thereof, or specific products and other
objects being moved for trade or other purposes, including those referred to in
points 2 to 7 of this Article;

25.         "specific import
authorisation" means a formal prior authorisation by the competent
authorities of the importing Party addressed to an individual importer as a
condition for import of a single consignment or multiple consignments of a
commodity from the exporting Party, within the scope of this Agreement;

26.         "working days"
means week days except Sunday, Saturday and public holidays in one of the
Parties;

27.         "inspection"
means the examination of any aspect of feed, food, animal health and animal
welfare in order to verify that such aspect(s) comply with the legal
requirements of feed and food law and animal health and animal welfare rules;

28.         "plant health
inspection" means official visual examination of plants, plant products or
other regulated objects to determine if pests are present and/or to determine
compliance with phytosanitary regulations;

29.         "verification"
means checking, by examination and the consideration of objective evidence,
whether specified requirements have been fulfilled.

Article 63

Competent
authorities

The Parties
shall inform each other about the structure, organisation, and division of
competences of their competent authorities during the first meeting of the
Sanitary and Phytosanitary Management Sub-Committee (hereinafter referred to as
the "SPS Sub-Committee") referred to in Article 74 of this Agreement.
The Parties shall inform each other of any change concerning such competent
authorities, including contact points.

Article 64

Regulatory approximation

1.           Ukraine shall approximate
its sanitary and phytosanitary and animal welfare legislation to that of the EU
as set out in Annex V to this Agreement.

2.           The Parties shall
cooperate on legislative approximation and capacity building.

3.           The SPS Sub-Committee
shall regularly monitor implementation of the approximation process, set out in
Annex V to this Agreement, in order to provide the necessary recommendations on
approximation measures.

4.           Not later than three
months after the entry into force of this Agreement Ukraine shall submit to the
SPS Sub-Committee a comprehensive strategy for the implementation of this
Chapter, divided into priority areas that relate to measures, as defined in
Annex IV-A, Annex IV-B and Annex IV-C to this Agreement, facilitating trade in
one specific commodity or group of commodities. The strategy shall serve as the
reference document for the implementation of this Chapter and it will be added
to Annex V to this Agreement.[9]

Article 65

Recognition
for trade purposes of animal health and pest status and regional conditions

A.           Recognition of status for animal
diseases, infections in animals or pests

1.      As regards animal diseases and
infections in animals (including zoonosis), the following shall apply:

(a)     The importing Party shall recognise
for trade purposes the animal health status of the exporting Party or its
regions as determined by the exporting Party in accordance with Annex VII Part
A to this Agreement, with respect to animal diseases specified in Annex VI-A to
this Agreement;

(b)     Where a Party considers that it has,
for its territory or a region, a special status with respect to a specific
animal disease, other than those listed in Annex VI-A to this Agreement, it may
request recognition of this status in accordance with the criteria laid down in
Annex VII Part C to this Agreement. The importing Party may request guarantees
in respect of imports of live animals and animal products, which are
appropriate to the agreed status of the Parties;

(c)     The status of the territories or
regions, or the status in a sector or sub-sector of the Parties related to the
prevalence or incidence of an animal disease other than listed in Annex VI-A to
this Agreement, or infections in animals, and/or the associated risk, as
appropriate, as defined by OIE, is recognised by the Parties as the basis for
trade between them. The importing Party may request guarantees in respect of imports
of live animals and animal products which are appropriate to the defined status
in accordance with the recommendations of OIE, as appropriate.

(d)     Without prejudice to Articles 67, 69
and 73 of this Agreement, and unless the importing Party raises an explicit objection
and requests supporting or additional information or consultations and/or
verification, each Party shall take without undue delay the necessary
legislative and administrative measures to allow trade on the basis of the
provisions of subparagraphs (a), (b) and (c) of this paragraph.

2.      As regards pests, the following shall
apply:

(a)     The Parties recognise for trade
purposes their pest status in respect of pests specified in Annex VI-B to this Agreement;

(b)     Without prejudice to Articles 67, 69
and 73 of this Agreement, and unless the importing Party raises an explicit objection
and requests supporting or additional information or consultations and/or
verification, each Party shall take without undue delay the necessary
legislative and administrative measures to allow trade on the basis of the
provision of subparagraph (a) of this paragraph.

B.           Recognition of regionalisation/zoning,
pest-free areas (hereinafter referred to as "PFAs") and protected
zones (hereinafter referred to as the "PZs")

3.      The Parties recognise the concept of
regionalisation and PFAs as specified in the relevant Food and Agriculture
Organization/International Plant Protection Convention of 1997 and
International Standards for Phytosanitary Measures (hereinafter referred to as
"ISPM") of the Food and Agriculture Organization, and of protected
zones according to Directive 2000/29/EC, which they agree to apply to trade
between them.

4.      The Parties agree that regionalisation
decisions for animal and fish diseases listed in Annex VI-A, and for pests
listed in Annex VI-B to this Agreement, shall be taken in accordance with the
provisions of Annex VII Part A and B to this Agreement.

5.      (a)     As regards animal
diseases and in accordance with the provisions of Article 67 of this Agreement,
the exporting Party seeking recognition of its regionalisation decision by the
importing Party shall notify its measures with full explanations and supporting
data for its determinations and decisions. Without prejudice to Article 68 of
this Agreement, and unless the importing Party raises an explicit objection and
requests additional information or consultations and/or verification within 15
working days following receipt of the notification, the regionalisation
decision so notified shall be deemed as accepted;

(b)     The consultations referred to in
subparagraph (a) of this paragraph shall take place in accordance with Article
68(3) of this Agreement. The importing Party shall assess the additional
information within 15 working days following receipt of the additional
information. The verification referred to in subparagraph (a) shall be carried
out in accordance with Article 71 of this Agreement and within 25 working days
following receipt of the request for verification.

6.      (a)     As regards pests, each Party
shall ensure that trade in plants, plant products and other objects takes
account, as appropriate, of the pest status in an area recognised as a
protected zone or as a PFA by the other Party. A Party seeking recognition of
its PFA by the other Party shall notify its measures and, upon request, provide
full explanation and supporting data for its establishment and maintenance, as
guided by the relevant ISPMs as the Parties deem appropriate. Without prejudice
to Article 73 of this Agreement, and unless a Party raises an explicit
objection and requests additional information or consultations and/or
verification within three months following the notification, the regionalisation
decision for PFAs so notified shall be deemed as accepted;

(b)     The consultations referred to in
subparagraph (a) shall take place in accordance with Article 68(3) of this
Agreement. The importing Party shall assess the additional information within
three months following receipt of the additional information. The verification
referred to in subparagraph (a) shall be carried out in accordance with Article
71 of this Agreement and within 12 months following receipt of the request for
verification, taking into account the biology of the pest and the crop
concerned.

7.      After finalisation of the procedures
described in paragraphs 4 to 6 of this Article, and without prejudice to
Article 73 of this Agreement, each Party shall take, without undue delay, the
necessary legislative and administrative measures to allow trade on that basis.

C.           Compartmentalisation

The Parties commit themselves to engaging in
further discussions with a view to implementing the principle of compartmentalisation
referred to in Annex XIV to this Agreement.

Article 66

Determination
of equivalence

1.           Equivalence may be recognised
in relation to:

(a)     an individual measure; or

(b)     a group of measures; or

(c)     a system applicable to a sector,
sub-sector, commodities or
group of commodities.

2.           In the determination of
equivalence, the Parties shall follow the process set out in paragraph 3 of
this Article. This process shall include the objective demonstration of
equivalence by the exporting Party and the objective assessment of this
demonstration by the importing Party. This may include an inspection or
verification.

3.           Upon a request by the
exporting Party concerning recognition of equivalence, as set out in paragraph
1 of this Article, the Parties shall without delay and no later than three
months following receipt by the importing Party of such request, initiate the
consultation process which includes the steps set out in Annex IX to this
Agreement. However, if multiple requests are made by the exporting Party, the
Parties, at the request of the importing Party, shall agree within the SPS
Sub-Committee referred to in Article 74 of this Agreement on a time schedule in
which they shall initiate and conduct the process referred to in this
paragraph.

4.           When legislative
approximation is achieved as a result of the monitoring mentioned in Article
64(3) of this Agreement, this fact shall be deemed to be a request by Ukraine
to initiate the process of recognition of equivalence of relevant measures, as
set out in paragraph 3 of this Article.

5.           Unless otherwise agreed,
the importing Party shall finalise the determination of equivalence referred to
in paragraph 3 of this Article within 360 days after having received from the
exporting Party the request including a dossier demonstrating the equivalence, except for seasonal crops when it is
justifiable to delay the assessment to permit verification during a suitable
period of growth of a crop.

6.           The importing Party
determines equivalence as regards plants, plant products and other objects in
accordance with relevant ISPMs, as appropriate.

7.           The importing Party may
withdraw or suspend equivalence on the basis of any amendment by one of the
Parties of measures affecting equivalence, provided that the following
procedures are followed:

(a)     In accordance with the provisions of
Article 67(2) of this Agreement, the exporting Party shall inform the importing
Party of any proposal for amendment of its measures for which equivalence of
measures is recognised and the likely effect of the proposed measures on the
equivalence which has been recognised. Within 30 working days following the
receipt of this information, the importing Party shall inform the exporting
Party whether or not equivalence would continue to be recognised on the basis
of the proposed measures;

(b)     In accordance with the provisions of
Article 67(2) of this Agreement, the importing Party shall inform the exporting
Party of any proposal for amendment of its measures on which recognition of
equivalence has been based and the likely effect of the proposed measures on
the equivalence which has been recognised. Should the importing Party not
continue to recognise equivalence, the Parties may agree on the conditions to
re-initiate the process referred to in paragraph 3 of this Article on the basis
of the proposed measures.

8.           The recognition,
suspension or withdrawal of equivalence rests solely with the importing Party
acting in accordance with its administrative and legislative framework. That
Party shall provide to the exporting Party in writing full explanations and
supporting data used for the determinations and decisions covered by this
Article. In case of non-recognition, suspension or withdrawal of equivalence,
the importing Party shall indicate to the exporting Party the required
conditions on the basis which the process referred to in paragraph 3 may be
reinitiated.

9.           Without prejudice to
Article 73 of this Agreement, the importing Party may not withdraw or suspend
equivalence before the proposed new measures of either Party enter into force.

10.         In case equivalence is
formally recognised by the importing party, on the basis of the consultation
process as set out in Annex IX to this Agreement, the SPS Sub-Committee shall,
in accordance with the procedure set out in Article 74(2) of this Agreement,
declare recognition of equivalence in trade between the Parties. The decision
shall also provide for the reduction of physical checks at the frontiers,
simplified certificates and pre-listing procedures for the establishments as
appropriate.

The status of the equivalence shall be listed
in Annex IX to this Agreement.

11.         When laws are approximated,
the equivalence determination takes place on that basis.

Article 67

Transparency
and exchange of information

1.           Without prejudice to
Article 68 of this Agreement, the Parties shall cooperate to enhance mutual
understanding of their official control structure and mechanisms tasked with
the application of SPS measures and their respective performance. This can be
achieved, amongst others, through reports of international audits when these
are made public and the Parties can exchange information on the results of
these audits or other information, as appropriate.

2.           In the framework of
approximation of legislation as referred to in Article 64 or of determination
of equivalence as referred to in Article 66 of this Agreement, the Parties
shall keep each other informed of legislative or other procedural changes
adopted in the areas concerned.

3.           In this context, the EU
Party shall inform Ukraine well in advance of changes to the EU Party
legislation to allow Ukraine to consider modification of its legislation
accordingly.

The necessary level of cooperation should be
reached in order to facilitate transmission of legislative documents at the
request of one of the Parties.

To this effect, each Party shall notify the
other Party of its contact points. The Parties shall also notify each other of
any changes to this information.

Article 68

Notification,
consultation and facilitation of communication

1.           Each Party shall notify in
writing to the other Party within two working days, of any serious or significant
public, animal or plant health risk, including any food control emergencies or
situations where there is a clearly identified risk of serious health effects
associated with the consumption of animal or plant products and in particular
of:

(a)     any measures affecting regionalisation
decisions as referred to in Article 65 of this Agreement;

(b)     the presence or evolution of any
animal disease listed in Annex VI-A or of the regulated pests on the list
contained in Annex VI-B to this Agreement;

(c)     findings of epidemiological importance
or important associated risks with respect to animal diseases and pests which
are not listed
in Annex VI-A and Annex VI-B to this Agreement or which are new animal diseases
or pests; and

(d)     any additional measures going beyond
the basic requirements applicable to their respective measures taken to control
or eradicate animal diseases or pests or to protect public or plant health and
any changes in prophylactic policies, including vaccination policies.

2.           (a)     Notifications shall
be made in writing to the contact points referred to in Article 67(3) of this
Agreement.

(b)     Notification in writing means
notification by mail, fax or e-mail. Notifications shall only be sent between
the contact points referred to in Article 67(3) of this Agreement.

3.           Where a Party has serious
concerns regarding a risk to public, animal or plant health, consultations
regarding the situation shall, at the Party’s request, take place as soon as
possible and, in any case, within 15 working days. In such situations, each
Party shall endeavour to provide all the information necessary to avoid a
disruption in trade, and to reach a mutually acceptable solution consistent
with the protection of public, animal or plant health.

4.           Upon request by a Party,
consultations regarding animal welfare shall take place as soon as possible
and, in any case, within 20 working days from the date of notification. In such
situations, each Party shall endeavour to provide all the requested
information.

5            Upon request by a Party,
consultations as referred to in paragraphs 3 and 4 of this Article, shall be
held by video or audio conference. The requesting Party shall ensure the
preparation of the minutes of the consultation, which shall be formally
approved by the Parties. For the purposes of such approval, the provisions of
Article 67(3) of this Agreement shall apply.

6.           A mutually applied rapid
alert system and early warning mechanism for any veterinary and phytosanitary
emergencies will start at a later stage after Ukraine implements the necessary
legislation in this field and creates conditions for their proper
working on the spot.

.

Article 69

Trade
conditions

1.           General import
conditions

(a)     For any commodity covered by Annex
IV-A and Annex IV-C(2) to this Agreement, the Parties agree to apply general
import conditions. Without prejudice to the decisions
taken in accordance with Article 65 of this Agreement, the import conditions of
the importing Party shall be applicable to the total territory of the exporting
Party. Upon entry into force of this Agreement and in
accordance with the provisions of Article 67 of this Agreement, the importing
Party shall inform the exporting Party of its sanitary and phytosanitary import
requirements for commodities referred to in Annex IV-A and Annex IV-C(2) to
this Agreement. This information shall include, as appropriate, the models for
the official certificates or declarations or commercial documents, as
prescribed by the importing Party.

(b)     (i)      For the notification by
the Parties of amendments or proposed amendments of the conditions referred to
in paragraph 1 of this Article, they shall comply with the provisions of the
SPS Agreement and subsequent decisions, as regards notification of measures.
Without prejudice to the provisions of Article 73 of this Agreement, the
importing Party shall take into account the transport time between the Parties
to establish the date of entering into force of the amended conditions referred
to in paragraph 1(a).

(ii)      If the importing Party fails to
comply with these notification requirements, it shall continue to accept the certificate
or attestation guaranteeing the previously applicable conditions until 30 days
after entry into force of the amended import conditions.

2.           Import conditions after
recognition of equivalence

(a)     Within 90 days following the date of
adoption of a decision on recognition of equivalence, the Parties shall take
the necessary legislative and administrative measures to implement the
recognition of equivalence in order to allow on that basis trade between them
of commodities referred to in Annex IV-A and Annex IV-C(2) to this Agreement in
sectors and sub-sectors where applicable, for which all respective sanitary and phytosanitary measures of the exporting
Party are recognised as equivalent by the importing Party. For these commodities, the model of the official certificate or official document
required by the importing Party may, then, be replaced by a certificate drawn
up as provided for in Annex XII.B to this Agreement;

(b)     For commodities in sectors or sub-sectors, where applicable,
for which some but not all measures are recognised as equivalent, trade shall
continue on the basis of compliance with the conditions referred to in
paragraph 1(a). Upon request by the exporting Party,
the provisions of paragraph 5 of this Article shall apply.

3.           From the date of entry
into force of this Agreement, the commodities referred in Annex IV-A and Annex IV-C(2) to this Agreement shall not be subject to import authorisation.

Any entry into force of this Agreement earlier
than 31 December 2013 shall not have any impact on the Comprehensive
Institutional Building assistance.

4.           For conditions
affecting trade in the commodities referred to in paragraph 1(a), upon request by the exporting Party,
the Parties shall enter into consultations within the SPS Sub-Committee in
accordance with the provisions of Article 74 of this Agreement, in order to
agree on alternative or additional import conditions of the importing Party.
Such alternative or additional import conditions may, when appropriate, be
based on measures of the exporting Party recognised as equivalent by the
importing Party. If agreed, the importing Party shall take the necessary
legislative and/or administrative measures to allow import on that basis,
within 90 days.

5.           List of establishments,
conditional approval

(a)     For the import of animal products
referred to in Annex IV-A, Part 2 to this Agreement, upon a request by the
exporting Party accompanied by appropriate guarantees, the importing Party
shall provisionally approve
processing establishments referred to in Annex VIII(2.1) to this Agreement
which are situated in the territory of the exporting Party, without prior
inspection of individual establishments. Such approval
shall be consistent with the conditions and provisions set out in Annex VIII to
this Agreement. Unless additional information is requested, the importing Party
shall take the necessary legislative and/or administrative measures to allow
import on that basis within 30 working days following the date of receipt of
the request and relevant guarantees by the importing Party.

The initial list of establishments shall be
approved in accordance with the provisions of Annex VIII to this Agreement.

(b)     For the import of animal products referred
to in paragraph 2(a), the exporting Party shall inform the importing Party of
its list of establishments meeting the importing Party's requirements.

6.           Upon request by a
Party, the other Party shall provide necessary explanations and supporting data
for the determinations and decisions covered by this Article.

Article 70

Certification
procedure

1.           For purposes of certification procedures and issuing of certificates and
official documents, the Parties agree on the principles set out in Annex XII to
this Agreement.

2.           The SPS Sub-Committee
referred to in Article 74 of this Agreement may agree on rules to be followed
in case of electronic certification, withdrawal or replacement of certificates.

3.           In the framework of
approximated legislation as referred to in Article 64 of this Agreement, the
Parties will agree on common models of certificates
where applicable.

Article 71

Verification

1.           In order to maintain
confidence in the effective implementation of the provisions of this Chapter,
each Party shall have the right:

(a)     to carry out, in accordance with the
guidelines of Annex X to this Agreement, verification of all or part of the
other Party's authorities' total control program or other measures where
applicable. The expenses of such verification shall be borne by the Party
carrying out the verification;

(b)     from a date to be determined by the
Parties, to receive, at its request from the other Party, information about all
or part of that Party's total control programs and reports concerning the
results of the controls carried out under that program;

(c)     for laboratory tests related to
commodities of Annex IV-A and Annex IV-C(2) to this
Agreement, upon request, and where applicable, to participate in the periodical
inter-comparative test program for specific tests organized by the reference
laboratory of the other Party. The expenses of such participation shall be
borne by the participating Party.

2.           Either Party may share the
results of the verifications referred to in subparagraph 1(a) of this Article with
third parties and make the results publicly available as may be required by
provisions applicable to either Party. Confidentiality provisions applicable to
either Party shall be respected in such sharing and/or publication of the
results, where appropriate.

3.           The SPS Sub-Committee
referred to in Article 74 of this Agreement may modify, by means of a decision,
Annex X to this Agreement, taking due account of relevant work carried out by
international organizations.

4.           The results of
verification may contribute to measures by the Parties or one of the Parties
referred to in Articles 64, 66 and 72 of this Agreement.

Article 72

Import
checks and inspection fees

1.           The Parties agree that
import checks on importation by the importing Party of consignments from the
exporting Party shall respect the principles set out in Annex XI, Part A to
this Agreement. The results of these checks may contribute to the verification
process referred to in Article 71 of this Agreement.

2.           The frequencies of
physical import checks applied by each Party are set out in Annex XI, Part B to
this Agreement. A Party may amend these
frequencies within its competences and in accordance with its internal
legislation, as a result of progress made in accordance with Articles 64, 66
and 69 of this Agreement, or as a result of verifications, consultations or
other measures provided for in this Agreement. The SPS Sub-Committee
referred to in Article 74 of this Agreement shall by decision modify Annex XI,
Part B of this Agreement accordingly.

3.           Inspection fees may
only cover the costs incurred by the competent authority for performing import
checks. The fees shall be calculated on the same basis as fees charged for the
inspection of similar domestic products.

4.           The importing Party shall,
at the request of the exporting Party, inform it of any amendments, including
the reasons for these amendments, concerning the measures affecting import
checks and inspection fees and of any significant changes in the administrative
conduct of such checks.

5.           From a date to be
determined by the SPS Sub-Committee referred to in Article 74 of this Agreement,
the Parties may agree on the conditions to approve each other’s controls as
laid down in Article 71(1)(b) with a view to adapting and reciprocally reducing,
where applicable, the frequency of physical import checks for the commodities
referred to in Article 69(2) of this Agreement.

From that date the Parties may reciprocally
approve each other's controls for certain commodities and, consequently, reduce
or replace the import checks for these commodities.

6.           The conditions required
for approval of the adaptation of import checks shall be included in Annex XI
to this Agreement by the procedure referred to in Article 74(2) of this
Agreement.

Article 73

Safeguard
measures

1.           Should the importing Party
take within its territory measures to control any cause
likely to constitute a serious hazard or risk to human, animal or plant health,
the exporting Party, without prejudice to the provisions of paragraph 2 of this
Article, shall take equivalent measures to prevent the introduction of the
hazard or risk into the territory of the importing Party.

2.           On the basis of serious
public, animal or plant health grounds, the importing Party may take
provisional measures necessary for the protection of public, animal or plant
health. For consignments in transport between the Parties, the importing Party
shall consider the most suitable and proportionate solution in order to avoid
unnecessary disruption to trade.

3.           The Party adopting measures
under paragraph 2 of this Article shall inform the other Party no later than
one working day following the date of adoption of the measures. Upon request by
either Party, and in accordance with the provisions of Article 68(3) of this
Agreement, the Parties shall hold consultations regarding the situation within
15 working days of the notification. The Parties shall take due account of any
information provided through such consultations and shall endeavour to avoid
unnecessary disruption to trade, taking into account, where applicable, the
outcome of the consultations provided for in Article 68(3) of this Agreement.

Article 74

Sanitary
and Phytosanitary Management (SPS) Sub-Committee

1.           The
Sanitary and Phytosanitary Management (SPS) Sub-Committee is hereby
established. . The SPS Sub-Committee shall meet within three months, after the entry into force of this
Agreement, upon request of either Party thereafter, or at least once every
year. If agreed by the Parties, a meeting of the SPS Sub-Committee may be held
by video or audio-conference. The SPS Sub-Committee may also address issues out
of session, by correspondence.

2.           The SPS Sub-Committee
shall have the following functions:

(a)     to monitor the implementation of this
Chapter and consider any matter relating to this Chapter, and examine all
matters which may arise in relation to its implementation;

(b)     to review the Annexes to this Chapter,
notably in the light of progress made under the consultations and procedures
provided for under this Chapter;

(c)     in the light of the review provided
for in subparagraph (b) of this paragraph or as otherwise provided in this
Chapter, to modify, by means of a decision, Annexes IV to XIV to this
Agreement; and

(d)     in the light of the review provided
for in subparagraph (b) of this paragraph, to give opinions and make
recommendations to other bodies as defined in the Institutional, General and
Final Provisions of this Agreement.

3.           The Parties agree to
establish technical working groups, where appropriate, consisting of
expert-level representatives of the Parties, which shall identify and address
technical and scientific issues arising from the application of this Chapter.
When additional expertise is required, the Parties may establish ad hoc groups,
including scientific groups. Membership of such ad hoc groups need not be
restricted to representatives of the Parties.

4.           The SPS Sub-Committee shall regularly report to the
Trade Committee established under Article 465 of this Agreement on its activities and decisions taken within its
competence.

5.           The SPS Sub-Committee shall adopt its working procedures at its
first meeting.

6.           Any decision, recommendation, report or other action by
the SPS Sub-Committee or any group established by the SPS Sub-Committee, related to the authorisation of imports, exchange of information,
transparency, recognition of regionalisation, equivalency and alternative
measures, and any other issue covered by paragraphs 2 and 3, shall be adopted by consensus between the Parties.

CHAPTER 5

CUSTOMS
AND TRADE FACILITATION

Article 75

Objectives

The Parties acknowledge the importance of
customs and trade facilitation matters in the evolving bilateral trade
environment. The Parties agree to reinforce cooperation in this area with a view
to ensuring that the relevant legislation and procedures, as well as the
administrative capacity of the relevant administrations, fulfil the objectives
of effective control and support facilitation of legitimate trade as a matter
of principle.

The parties recognise that utmost
importance shall be given to legitimate public policy objectives including
trade facilitation, security and prevention of fraud and a balanced approach to
them.

Article 76

Legislation
and procedures

1.           The Parties agree that
their respective trade and customs legislation, as a matter of principle, shall
be stable and comprehensive, as well as that provisions and procedures shall be
proportionate, transparent, predictable, non-discriminatory, impartial and
applied uniformly and effectively and will inter alia:

(a)     protect and facilitate legitimate
trade through effective enforcement of and compliance with legislative
requirements;

(b)     avoid unnecessary or discriminatory
burdens on economic operators, prevent fraud and provide further facilitation
for economic operators having a high level of compliance;

(c)     apply a single administrative document
for the purposes of customs declarations;

(d)     lead to greater efficiency,
transparency and simplification of customs procedures and practices at the
border;

(e)     apply modern customs techniques,
including risk assessment, post clearance controls and company audit methods in
order to simplify and facilitate the entry and release of goods;

(f)      aim at reducing costs and increasing
predictability for economic operators, including small and medium-sized
companies;

(g)     without prejudice to the application
of objective risk assessment criteria, ensure the non-discriminatory
application of requirements and procedures applicable to imports, exports and
goods in transit;

(h)     apply the international instruments
applicable in the field of customs and trade including those developed by the
World Customs Organization (hereinafter referred to as the "WCO")
(Framework of Standards to Secure and Facilitate Global Trade of 2005, Istanbul
Convention on temporary admission of 1990, HS Convention) of 1983, the WTO
(e.g. on Valuation), the UN (TIR Convention of 1975, 1982 Convention on
harmonization of frontier controls of goods), as well as EC guidelines such as
the Customs Blueprints;

(i)      take the necessary measures to
reflect and implement the provisions of the Revised Kyoto Convention on the
Simplification and Harmonization of Customs Procedures of 1973;

(j)      provide for advance binding rulings
on tariff classification and rules of origin. The Parties ensure that a ruling
may be revoked or annulled only after notification to the affected operator and
without retroactive effect unless the rulings have been made on the basis of
incorrect or incomplete information;

(k)     introduce and apply simplified
procedures for authorised traders according to objective and non-discriminatory
criteria;

(l)      set rules that ensure that any
penalties imposed for breaches of customs regulations or procedural
requirements be proportionate and non-discriminatory and, in their application,
do not result in unwarranted and unjustified delays;

(m)    apply transparent, non-discriminatory and proportionate rules in respect of the
licensing of customs brokers.

2.           In order to improve
working methods, as well as to ensure non-discrimination, transparency,
efficiency, integrity and accountability of operations, the Parties shall:

(a)     take further steps towards the
reduction, simplification and standardization of data and documentation
required by customs and other agencies;

(b)     simplify requirements and formalities
wherever possible, in respect of the prompt release and clearance of goods;

(c)     provide effective, prompt and
non-discriminatory procedures guaranteeing the right of appeal against customs
and other agencies administrative actions, rulings and decisions affecting the
goods submitted to customs. Such procedures for appeal shall be easily
accessible, including to small or medium enterprises and any costs shall be
reasonable and commensurate with costs in providing for appeals. Take steps to
ensure that where a disputed decision is the subject of an appeal, goods should
normally be released and duty payments may be left pending, subject to any
safeguarding measures judged necessary. Where required, this should be subject to
the provision of a guarantee, such as a surety or deposit;

(d)     ensure that the highest standards of
integrity be maintained, in particular at the border, through the application
of measures reflecting the principles of the relevant international conventions
and instruments in this field, in particular the WCO Revised Arusha Declaration
(2003) and the EC Blueprint on Customs ethics (2007).

3.           The Parties agree to eliminate:

(a)     any requirements for the mandatory use
of customs brokers;

(b)     any requirements for the mandatory use
of pre-shipment inspections or destination inspection.

4.           Provisions
on transit

(a)     For the purposes of this Agreement,
the transit rules and definitions as set out in the WTO provisions (Article V
of GATT 1994, and related provisions, including any clarifications and
improvements resulting from the Doha Round negotiations on trade facilitation)
shall apply. These provisions also apply when the transit of goods begins or
ends in the territory of a Party (inland transit).

(b)     The Parties shall pursue the
progressive interconnectivity of their respective customs transit systems, with
a view to Ukrainian’s future participation in the common transit system[10].

(c)     The Parties shall ensure cooperation
and coordination between all concerned authorities and agencies in their
territories to facilitate traffic in transit and promote cooperation across
borders. Parties shall also promote cooperation between authorities and the
private sector in relation to transit.

Article 77

Relations
with the business community

The Parties agree:

(a)          to ensure that their respective
legislation and procedures are transparent, made publicly available, as far as
possible through electronic means, together with the justification for them.
There should be a consultation mechanism in place and reasonable time period
between the publication of new or amended provisions and their entry into
force;

(b)          on the need for timely and
regular consultations with trade representatives on legislative proposals and
procedures related to customs and trade issues. To this end, mechanisms for appropriate
and regular consultation between administrations and the business community
shall be established by each Party;

(c)          to make publicly available
relevant notices of an administrative nature, including agency requirements and
entry procedures, hours of operations and operating procedures for customs
offices at ports and border crossing points, and points of contact for
information enquiries;

(d)          to foster cooperation between
operators and relevant administrations via the use of non-arbitrary and
publicly accessible procedures, such as Memoranda of Understanding based in
particular on those promulgated by the WCO;

(e)          to ensure that their respective
customs and related requirements and procedures continue to meet the legitimate
needs of the trading community, follow best practices, and remain the least
trade-restrictive possible.

Article 78

Fees
and charges

The Parties
shall prohibit administrative fees having an equivalent effect to import or
export duties and charges.

With regard to
all fees and charges of whatever character imposed by the customs authorities
of each Party, including fees and charges for tasks undertaken by another
instance on behalf of the said authorities, on or in connection with
importation or exportation and without prejudice to the relevant Articles in
Chapter 1 (National Treatment and Market Access for Goods) of Title IV of this
Agreement:

(a)          fees and charges may only be
imposed for services provided outside of appointed hours and in places other
than those referred to in customs regulations, at the request of the declarant
in connection with the importation or exportation in question or for any
formality required for undertaking such importation or exportation;

(b)          fees and charges shall not exceed
the cost of the service provided;

(c)          fees and charges shall not be
calculated on an ad valorem basis;

(d)          information on fees and charges
shall be published. This information shall include the reason for the fee or
charge for the service provided, the responsible authority, the fees and
charges that will be applied, and when and how payment is to be made.

The information on fees and charges shall be
published via an officially designated medium, and where feasible and possible,
official website;

(e)          new or amended fees and charges
shall not be imposed until information on them is published and made readily
available.

Article 79

Customs
valuation

1.           The Agreement on the
Implementation of Article VII of GATT 1994 contained in Annex 1A to the WTO Agreement, including any subsequent amendments,
shall govern the customs valuation of goods in trade between the Parties. Its
provisions are hereby incorporated into and made part of this Agreement.
Minimum customs values shall not be used.

2.           The Parties shall
cooperate with a view to reaching a common approach to issues relating to
customs valuation.

Article 80

Customs
cooperation

The Parties shall
strengthen cooperation to ensure implementation of the objectives of this
Chapter, striking a reasonable balance between simplification and facilitation
and effective control and security. To this end the Parties will use, where
appropriate, the EC Customs Blueprints as a benchmarking tool.

In order to ensure compliance with the
provisions of this Chapter the Parties shall inter alia:

(a)          exchange information concerning
customs legislation and procedures;

(b)          develop joint initiatives
relating to import, export and transit procedures, as well as work towards
ensuring that an effective service is provided to the business community;

(c)          cooperate on the automation of
customs and other trade procedures;

(d)          exchange, where appropriate,
relevant information and data subject to respect of confidentiality of
sensitive data and personal data protection;

(e)          exchange information/enter into
consultations with a view to establishing where possible, common positions in
international organisations in the field of customs such as the WTO, the WCO,
the UN, the United Nations Conference on Trade And Development and the United
Nations Economic Commission for Europe;

(f)           cooperate in the planning and
delivery of technical assistance, notably to facilitate customs and trade
facilitation reforms in line with the relevant provisions of this Agreement;

(g)          exchange best practices in
customs operations focusing in particular on intellectual property rights
enforcement, especially in relation to counterfeited products;

(h)          promote coordination between all
border agencies, both internally and across the borders to facilitate border-crossing
processes and enhance control, taking into account joint border controls where
feasible and appropriate;

(i)           mutually recognise, where
relevant and appropriate, authorised traders and customs controls. The scope of
this cooperation, the implementation and the practical arrangements shall be
decided by the Customs Sub-Committee provided for in Article 83 of this
Agreement.

Article 81

Mutual
administrative assistance in customs matters

Notwithstanding Article 80 of this
Agreement, the administrations of the Parties shall provide mutual
administrative assistance in customs matters in accordance with the provisions
laid down in Protocol 2 to this Agreement on Mutual Administrative Assistance
in Customs Matters.

Article 82

Technical
assistance and capacity building

The Parties shall cooperate with a view to
providing technical assistance and capacity building for the implementation of
trade facilitation and customs reforms.

Article 83

Customs
Sub-Committee

The Customs Sub-Committee is hereby
established. It shall report on its activities to the Association Committee in
its configuration under Article 465(4) of this Agreement. The function of the
Customs Sub-Committee shall include regular consultations and monitoring of
implementation and administration of this Chapter, including the issues of
customs cooperation, cross-border customs cooperation and management, technical
assistance, rules of origin, and trade facilitation, as well as mutual
administrative assistance in customs matters.

The Customs Sub-Committee
shall inter alia:

(a)          see to the proper functioning of
this Chapter and of Protocols 1 and 2 to this Agreement;

(b)          decide measures and practical
arrangements for implementing this Chapter and Protocols 1 and 2 to this
Agreement including on exchange of information and data, mutual recognition of
customs controls and trade partnership programmes, and mutually agreed
benefits;

(c)          exchange views on any points of
common interest, including future measures and the resources for them;

(d)          make recommendations where
appropriate;

(e)          adopt its internal rules of
procedures.

Article 84

Approximation
of customs legislation

Gradual approximation to the EU customs
legislation as laid down in the EU and international standards shall be carried
out as set out in Annex XV to this Agreement.

CHAPTER 6

ESTABLISHMENT,
TRADE IN SERVICES AND ELECTRONIC COMMERCE

Section
1

General
Provisions

Article 85

Objective,
scope and coverage

1.           The Parties, reaffirming
their respective rights and obligations under the WTO Agreement, hereby lay
down the necessary arrangements for the progressive reciprocal liberalisation
of establishment and trade in services and for cooperation on electronic
commerce.

2.           Government procurement is
dealt with by Chapter 8 (Government Procurement) of Title IV of this Agreement and
nothing in this Chapter shall be construed in such a way as to impose any
obligation with respect to government procurement.

3.           Subsidies are dealt with
in Chapter 10 (Competition) of Title IV of this Agreement and the provisions of
this Chapter shall not apply to subsidies granted by the Parties.

4.           Consistent with the
provisions of this Chapter, each Party retains the right to regulate and to
introduce new regulations to meet legitimate policy objectives.

5.           This Chapter shall not
apply to measures affecting natural persons seeking access to the employment
market of a Party, nor shall it apply to measures regarding citizenship,
residence or employment on a permanent basis.

Without prejudice to the provisions on movement
of persons set out in Title III (Justice Freedom and Security) of this
Agreement, nothing in this Chapter shall prevent a Party from applying measures
to regulate the entry of natural persons into, or their temporary stay in, its
territory, including those measures necessary to protect the integrity of, and
to ensure the orderly movement of natural persons across its borders, provided
that such measures are not applied in such a manner as to nullify or impair the
benefits accruing to any Party under the terms of this Chapter[11].

Article 86

Definitions

For the purposes of this Chapter:

1.           "measure" means
any measure by a Party, whether in the form of a law, regulation, rule,
procedure, decision, administrative action, or any other form;

2.           "measures adopted or
maintained by a Party" means measures taken by:

(a)     central, regional or local governments
and authorities; and

(b)     non-governmental bodies in the
exercise of powers delegated by central, regional or local governments or
authorities;

3.           a "natural person of
a Party" means a national of an EU Member State or a national of Ukraine
according to the respective legislation;

4.           "legal person"
means any legal entity duly constituted or otherwise organized under applicable
law, whether for profit or otherwise, and whether privately-owned or
governmentally-owned, including any corporation, trust, partnership, joint
venture, sole proprietorship or association;

5.           a "legal person of
the EU Party" or a "legal person of Ukraine" means:

a legal person set up in accordance with the
laws of a Member State of the European Union or of Ukraine respectively, and
having its registered office, central administration, or principal place of
business in the territory to which the Treaty on the Functioning of the
European Union applies or in the territory of Ukraine, respectively;

Should this legal person
have only its registered office or central administration in the territory to
which the Treaty on the Functioning of the European Union applies or in the
territory of Ukraine respectively, it shall not be considered as a legal person
of the EU Party or a legal person of Ukraine respectively, unless its
operations possess a real and continuous link with the economy of the EU Party
or of Ukraine, respectively;

6.           Notwithstanding the
preceding paragraph, shipping companies established outside the EU Party or Ukraine and controlled by nationals of a
Member State of the European Union or of Ukraine, respectively, shall also be
beneficiaries of the provisions of this Agreement, if their vessels are
registered in accordance with their respective legislation, in that Member
State or in Ukraine and carry the flag of a Member State or of Ukraine;

7.           "subsidiary" of
a legal person of a Party means a legal person which is effectively controlled by another legal person of that Party[12];

8.           "branch" of a legal person means a place of
business not having legal personality which:

(a)     has the appearance of permanency such
as the extension of a parent body;

(b)     has a management structure; and

(c)     is materially equipped to negotiate
business with third parties so that the latter, although knowing that there
will if necessary be a legal link with the parent body, the head office of
which is abroad, do not have to deal directly with such parent body but may
transact business at the place of business constituting the extension;

9.           "establishment"
means:

(a)     as regards legal persons of the EU
Party or of Ukraine, the right to take up and pursue economic activities by
means of setting up, including the acquisition of, a legal person and/or create
a branch or a representative office in Ukraine or in the EU Party respectively;

(b)     as regards natural persons, the right
of natural persons of the EU Party or of Ukraine to take up and pursue economic
activities as self-employed persons, and to set up undertakings, in particular
companies, which they effectively control.

10.         "investor" means
any natural or legal person of a Party that seeks to perform or performs an
economic activity through setting up an establishment;

11.         "economic
activities" includes activities of an industrial, commercial and
professional character and activities of craftsmen and do not include
activities performed in the exercise of governmental authority;

12.         "operations"
means the pursuit of economic activities;

13.         "services"
includes any service in any sector except services supplied in the exercise of
governmental authority;

14.         "services and other
activities performed in the exercise of governmental authority" are
services or activities which are performed neither on a commercial basis nor in
competition with one or more economic operators;

15.         "cross-border supply of services" means the supply of a
service:

(a)     from the
territory of a Party into the territory of the other Party;

(b)     in the
territory of a Party to a service consumer of the other Party.

16.         "service
supplier" of a Party means any natural or legal person of a Party that
seeks to supply or supplies a service, including through an establishment;

17.         "key personnel"
means natural persons employed within a legal person of one Party other than a non-profit organisation and who are
responsible for the setting-up or the proper control, administration and
operation of an establishment.

"Key personnel" comprise business
visitors responsible for setting up an
establishment and intra-corporate transfers.

(a)     "Business visitors" means natural persons working in a
senior position who are responsible for setting up an establishment. They do
not engage in direct transactions with the general public and do not receive
remuneration from a source located within the host Party;

(b)     "Intra-corporate transferees"
means natural persons who have been employed by a legal person of one Party or
have been partners in it (other than as majority shareholders) for at least one
year and who are temporarily transferred to an establishment in the territory
of the other Party. The natural person concerned must belong one of the following categories:

(i) Managers:

Persons working
in a senior position within a legal person who primarily direct the management
of the establishment, receiving general supervision or direction principally
from the board of directors or stockholders of the business or their
equivalent, including:

–
directing the establishment or a department or
sub-division thereof;

–
supervising and controlling the work of other
supervisory, professional or managerial employees;

–
having the authority personally to recruit and
dismiss personnel or recommend recruiting and dismissing personnel or take other
related-actions.

(ii) Specialists:

Persons working
within a legal person, who possess uncommon knowledge essential to the
establishment’s production, research equipment, techniques or management. In
assessing such knowledge, account
will be taken not only of knowledge specific to the establishment, but also whether the person has a high level of qualification for a
type of work or trade requiring specific technical knowledge, including
membership of an accredited profession.

18.         "graduate trainees"
means natural persons of a Party who have
been employed by a legal person of that Party for at least one year, possess a
university degree and are temporarily transferred to an establishment in the
territory of the other Party for career development purposes or to obtain
training in business techniques or methods[13];

19.         "business services
sellers" means natural persons who are representatives of a service
supplier of one Party seeking entry into and temporary stay in the territory of
the other Party for the purpose of negotiating the sale of services or entering
into agreements to sell services for that service supplier. They do not engage
in making direct sales to the general public and do not receive remuneration
from a source located within the host Party;

20.         "contractual services
suppliers" means natural persons employed by a legal person of one Party
which has no establishment in the territory of the other Party and which has
concluded a bona fide contract[14] to supply services with a final consumer in the latter
Party requiring the presence on a temporary basis of its employees in that
Party in order to fulfil the contract to provide services;

21.         "independent
professionals" means natural persons engaged in the supply of a service
and established as self-employed in the territory of a Party who have no
establishment in the territory of the other Party and who have concluded a bona
fide contract[15]
to supply services with a final consumer in the latter Party requiring their
presence on a temporary basis in that Party in order to fulfil the contract to
provide services.

Section 2

Establishment

Article 87

Scope

This Section applies to measures adopted or
maintained by the Parties affecting establishment[16] in respect of all economic
activities with the exception of:

(a)          mining, manufacturing and
processing[17]
of nuclear materials;

(b)          production of or trade in arms,
munitions and war material;

(c)          audio-visual services;

(d)          national maritime cabotage[18], and

(e)          domestic and international air
transport services[19],
whether scheduled or un-scheduled, and services directly related to the
exercise of traffic rights, other than:

(i) aircraft repair and maintenance services
during which an aircraft is withdrawn from service;

(ii) the selling and marketing of air
transport services;

(iii) computer reservation system (hereinafter
referred to as "CRS") services;

(iv) ground handling services;

(v) airport operation services.

Article 88

National
treatment and Most Favourable Nation treatment

1.           Subject to reservations
listed in Annex XVI-D to this Agreement, Ukraine shall grant, upon entry into force of this
Agreement:

(i)      as regards the establishment of
subsidiaries, branches and representative offices of legal persons of the EU
Party, treatment no less favourable than that accorded to its own legal
persons, branches and representative offices or to any third-country legal
persons, branches and representative offices, whichever is the better;

(ii)     as regards the operation of
subsidiaries, branches and representative offices of legal persons of the EU
Party in Ukraine, once established, treatment no less favourable than that
accorded to its own legal persons, branches and representative offices; or to
any third-country legal persons, branches and representative offices, whichever
is the better.[20]

2.           Subject to reservations
listed in Annex XVI-A to this Agreement, the EU Party shall grant, upon entry
into force of this Agreement:

(i)      as regards the establishment of
subsidiaries, branches and representative offices of legal persons of Ukraine,
treatment no less favourable than that accorded by the EU Party to its own
legal persons, branches and representative offices or to any third-country
legal persons, branches and representative offices, whichever is the better;

(ii)     as regards the operation of
subsidiaries, branches and representative offices of legal persons of Ukraine
in the EU Party, once established, treatment no less favourable than that
accorded to its own legal persons, branches and representative offices; or to
any third-country legal persons, branches and representative offices, whichever
is the better.[21]

3.           Subject to reservations
listed in Annexes XVI-A and XVI-D to this Agreement, the Parties shall not
adopt any new regulations or measures which introduce discrimination as regards
the establishment of legal persons of the EU Party or of Ukraine on their
territory or in respect of their operation, once established, by comparison
with their own legal persons.

Article 89

Review

1.           With a view to
progressively liberalising the establishment conditions, the Parties shall
regularly review the establishment legal framework[22] and the establishment climate,
consistent with their commitments under international agreements.

2.           In the context of the
review referred to in paragraph 1 of this Article, the Parties shall assess any
obstacles to establishment that have been encountered and shall undertake
negotiations to address such obstacles, with a view to deepening the provisions
of this Chapter and to including investment protection provisions and
investor-to-state dispute settlement procedures.

Article 90

Other
agreements

Nothing in this
Chapter shall be taken to limit the rights of investors of the Parties to
benefit from any more favourable treatment provided for in any existing or
future international agreement relating to investment to which a Member State
of the European Union and Ukraine are parties.

Article 91

Standard
of treatment for branches and representative offices

1.           The provisions of Article 88
of this Agreement do not preclude the application by a Party of particular
rules concerning the establishment and operation in its territory of branches
and representative offices of legal persons of the other Party not incorporated
in the territory of the first Party, which are justified by legal or technical
differences between such branches and representative offices as compared to
branches and representative offices of companies incorporated in its territory
or, as regards financial services, for prudential reasons.

2.           The difference in treatment
shall not go beyond what is strictly necessary as a result of such legal or
technical differences or, as regards financial services, for prudential
reasons.

Section
3

Cross-Border
Supply of Services

Article 92

Scope

This Section
applies to measures of the Parties affecting the cross border supply of all
services sectors with the exception of:

(a)          audio-visual services[23];

(b)          national maritime cabotage[24] ; and

(c)          domestic and international air
transport services[25],
whether scheduled or un-scheduled, and services directly related to the
exercise of traffic rights other than:

(i) aircraft repair and maintenance services
during which an aircraft is withdrawn from service;

(ii) the selling and marketing of air
transport services;

(iii) CRS services;

(iv) ground handling services;

(v) airport operation services.

Article 93

Market access

1.           With respect to market
access through the cross-border supply of services, each Party shall
accord services and service suppliers of the other Party treatment no less favourable
than that provided for in the specific commitments contained in Annexes XVI-B
and XVI-E to this Agreement.

2.           In sectors where market
access commitments are undertaken, the measures which a Party shall not
maintain or adopt either on the basis of a regional subdivision or on the basis
of its entire territory, unless otherwise specified in Annex XVI-B and XVI-E to
this Agreement, are defined as:

(a)     limitations on the number of services
suppliers whether in the form of numerical quotas, monopolies, exclusive
service suppliers or the requirements of an economic needs test;

(b)     limitations on the total value of
service transactions or assets in the form of numerical quotas or the
requirement of an economic needs test;

(c)     limitations on the total number of
service operations or on the total quantity of service output expressed in the
terms of designated numerical units in the form of quotas or the requirement of
an economic needs test.

Article 94

National treatment

1.           In the sectors where
market access commitments are inscribed in Annexes XVI-B and XVI-E to this
Agreement, and subject to any conditions and qualifications set out therein,
each Party shall grant to services and service suppliers of the other Party, in
respect of all measures affecting the cross-border supply of services,
treatment no less favourable than that it accords to its own like service and
services suppliers.

2.           A Party may meet the
requirement of paragraph 1 of this Article by according to services and service
suppliers of the other Party either formally identical treatment or formally
different treatment to that it accords to its own like services and service
suppliers.

3.           Formally identical or
formally different treatment shall be considered to be less favourable if it
modifies the conditions of competition in favour of services or service
suppliers of the Party compared to like services or service suppliers of the
other Party.

4.           Specific commitments
assumed under this Article shall not be construed in such a way as to require
any Party to compensate for inherent competitive disadvantages which result
from the foreign character of the relevant services or services suppliers.

Article 95

Lists of commitments

1.           The sectors liberalised by
each of the Parties pursuant to this Chapter and, by means of reservations, the
market access and national treatment limitations applicable to services and
services suppliers of the other Party in those sectors are set out in lists of
commitments contained in Annexes XVI-B and XVI-E to this Agreement.

2.           Without prejudice to the
Parties' rights and obligations as they exist or may arise under the Council of
Europe’s Convention on Transfrontier Television of 1989 and European Convention
on Cinematographic Co-Production of 1992, lists of commitments in Annexes XVI-B
and XVI-E to this Agreement do not include commitments on audio-visual
services.

Article 96

Review

With a view to progressive
liberalisation of the cross-border supply of services between the Parties, the
Trade Committee shall regularly review the lists of commitments referred to in
Article 95 of this Agreement. This review shall take into account the level of
advancement as regards the transposition, implementation and enforcement of the
EU acquis referred to in Annex XVII to this Agreement and resultant impact
on the elimination of remaining obstacles to cross-border supply of services
between the Parties.

Section 4

Temporary Presence of Natural Persons for
Business Purposes

Article 97

Scope

This Section applies to measures of the
Parties concerning the entry into and temporary stay[26] in their territory of
categories of natural persons providing services as defined in Article 86 (17)
to (21) of this Agreement.

Article 98

Key personnel

1.           A legal person of the EU
Party or a legal person of Ukraine shall be entitled to employ, or have
employed by one of its subsidiaries, branches and representative offices
established in the territory of Ukraine or of the EU Party respectively, in
accordance with the legislation in force in the host country of establishment,
employees who are nationals of the Member States of the European Union and of
Ukraine respectively, provided that such employees are key personnel as defined
in Article 86 of this Agreement who are employed exclusively by legal persons,
subsidiaries, branches and representative offices . The residence and work
permits of such employees shall only cover the period of such employment. The
entry and temporary stay of such employees shall be for a period of up to three
years.

2.           The entry into and temporary
presence within the territory of the EU Party or Ukraine of natural persons of
Ukraine and of the EU Party respectively shall be permitted, when these natural
persons are representatives of legal persons and are business visitors within
the meaning of Article 86(17)(a) of this Agreement. Notwithstanding paragraph 1
of this Article, the entry and temporary stay of business visitors shall be for
a period of up to 90 days in any 12-month period.

Article 99

Graduate trainees

A legal person of the
EU Party or a legal person of Ukraine shall be entitled to employ, or have
employed by one of its subsidiaries, branches and representative offices
established in the territory of Ukraine or of the EU Party respectively, in
accordance with the legislation in force in the host country of establishment,
graduate trainees who are nationals of the Member States of the European Union
and of Ukraine respectively, provided that they are employed exclusively by
legal persons, subsidiaries, branches and representative offices. The temporary entry and stay of graduate trainees shall be for a
period of up to one year.

Article 100

Business services sellers

Each Party
shall allow the temporary entry and stay of business services sellers for a period
of up to 90 days in any 12-month period.

Article 101

Contractual services suppliers

1.           The Parties reaffirm their
respective obligations arising from their commitments under the General
Agreement on Trade in Services of 1994 (hereinafter referred to as
"GATS") as regards the entry and temporary stay of contractual
services suppliers.

2.           For every sector listed
below, each Party shall allow the supply of services in their territory by
contractual services suppliers of the other Party, subject to the conditions
specified in paragraph 3 of this Article and in Annexes XVI-C and XVI-F to this
Agreement on reservations on contractual service suppliers and independent
professionals:

(a)     Legal services

(b)     Accounting and bookkeeping services

(c)     Taxation advisory services

(d)     Architectural services, urban planning
and landscape architectural services

(e)     Engineering services, integrated
engineering services

(f)      Computer and related services

(g)     Research and development services

(h)     Advertising

(i)      Management consulting services

(j)      Services related to management
consulting

(k)     Technical testing and analysis
services

(l)      Related scientific and technical
consulting services

(m)    Maintenance and repair of equipment in
the context of an after-sales or after-lease services contract

(n)     Translation services

(o)     Site investigation work

(p)     Environmental services

(q)     Travel agencies and tour operator
services

(r)      Entertainment services

3.           The commitments undertaken
by the Parties are subject to the following conditions:

(a)     The natural persons must be engaged in
the supply of a service on a temporary basis as employees of a juridical
person, which has obtained a service contract not exceeding twelve months;

(b)     The natural persons entering the other
Party should be offering such services as employees of the juridical person
supplying the services for at least the year immediately preceding the date of
submission of an application for entry into the other Party. In addition, the
natural persons must possess, at the date of submission of an application for
entry into the other Party, at least three years professional experience[27] in the sector of activity
which is the subject of the contract;

(c)     The natural persons entering the other
Party must possess:

(i)      a university degree or a
qualification demonstrating knowledge of an equivalent level[28]; and

(ii)      professional qualifications where
this is required to exercise an activity pursuant to the laws, regulations or
legal requirements of the Party where the service is supplied.

(d)     The natural person shall not receive
remuneration for the provision of services in the territory of the other Party
other than the remuneration paid by the legal person employing the natural
person;

(e)     The entry and temporary stay of
natural persons within the Party concerned shall be for a cumulative period of
not more than six months or, in the case of Luxembourg, twenty-five weeks in
any twelve month period or for the duration of the contract, whichever is less;

(f)      Access accorded under the provisions
of this Article relates only to the service activity which is the subject of
the contract and does not confer entitlement to exercise the professional title
of the Party where the service is provided;

(g)     The number of persons covered by the
service contract shall not be larger than necessary to fulfil the contract, as
it may be requested by the laws, regulations or other legal requirements of the
Party where the service is supplied;

(h)     Other discriminatory limitations,
including on the number of natural persons in the form of economic needs tests,
as specified in Annexes XVI-C and XVI–F to this Agreement on reservations on
contractual service suppliers and independent professionals.

Article 102

Independent professionals

1.           The Parties reaffirm their
respective obligations arising from their commitments under the GATS as regards
the entry and temporary stay of independent professionals.

2.           For every sector listed
below, the Parties shall allow the supply of services in their territory by
independent professionals of the other Party, subject to the conditions
specified in paragraph 3 of this Article and in Annexes XVI-C and XVI-F to this
Agreement on reservations on contractual service suppliers and independent
professionals.

(a)     Legal services

(b)     Architectural services, urban planning
and landscape architecture

(c)     Engineering and integrated engineering
services

(d)     Computer and related services

(e)     Management consulting services and
services related to management consulting

(f)      Translation services

3.           The commitments undertaken
by the Parties are subject to the following conditions:

(a)     The natural persons must be engaged in
the supply of a service on a temporary basis as self-employed persons
established in the other Party and must have obtained a service contract for a
period not exceeding 12 months;

(b)     The natural persons entering the other
Party must possess, at the date of submission of an application for entry into
the other Party, at least six years professional experience in the sector of
activity which is the subject of the contract;

(c)     The natural persons entering the other
Party must possess:

(i)      a university degree or a
qualification demonstrating knowledge of an equivalent level[29]; and

(ii)      professional qualifications where
this is required to exercise an activity pursuant to the law, regulations or
other legal requirements of the Party where the service is supplied.

(d)     The entry and temporary stay of
natural persons within the Party concerned shall be for a cumulative period of
not more than six months or, in the case of Luxembourg, 25 weeks in any twelve-month
period or for the duration of the contract, whatever is less.

(e)     Access accorded under the provisions
of this Article relates only to the service activity which is the subject of
the contract; it does not confer entitlement to use the professional title of
the Party where the service is provided.;

(f)      Other discriminatory limitations,
including on the number of natural persons in the form of economic needs tests,
which are specified in Annexes XVI-C and XVI-F to this Agreement on
reservations on contractual service suppliers and independent professionals.

Section
5

Regulatory
Framework

Sub-Section
1

Domestic
Regulation

Article 103

Scope and definitions

1.           The following disciplines
apply to measures by the Parties relating to licensing that affect:

(a)     cross-border supply of services;

(b)     establishment in their territory of
legal and natural persons defined in Article 86 of this Agreement; or

(c)     temporary stay in their territory of
categories of natural persons defined in Article 86(17 to 21) of this Agreement.

2.           In the case of
cross-border supply of services, these disciplines shall only apply to sectors
for which the Party has undertaken specific commitments and to the extent that
these specific commitments apply. In the case of establishment, these
disciplines shall not apply to sectors to the extent that a reservation is
listed in accordance with Annexes XVI-A and XVI-D to this Agreement. In the
case of temporary stay of natural persons, these disciplines shall not apply to
sectors for which a reservation is listed in accordance with Annexes XVI-C and
XVI-F to this Agreement.

3.           These disciplines do not
apply to measures to the extent that they constitute limitations subject to
scheduling under Articles 88, 93 and 94 of this Agreement.

4.           For the purposes of this
Section:

(a)     "Licensing" means the
process through which a service supplier or an investor is in effect
required to take steps in order to obtain from a competent authority a decision
concerning the authorisation to supply a service, including through
establishment, or concerning the authorisation to establish in an economic
activity other than services, including a decision to amend or renew such
authorisation.

(b)     "Competent authority" means
any central, regional or local government and authority or non-governmental
body in the exercise of powers delegated by central or regional or local
governments or authorities, which takes a decision concerning licensing.

(c)     "Licensing procedures" shall
mean the procedures to be followed as a part of licensing.

Article 104

Conditions for licensing

1.           Licensing shall be based
on criteria which preclude the competent authorities from exercising their
power of assessment in an arbitrary manner.

2.           The criteria referred to
in paragraph 1 of this Article shall be:

(a)     proportionate to a legitimate public
policy objective;

(b)     clear and unambiguous;

(c)     objective;

(d)     pre-established;

(e)     made public in advance;

(f)      transparent and accessible.

3.           A licence shall be granted
as soon as it is established, in the light of an appropriate examination, that
the conditions for obtaining a licence have been met.

4.           The Article 286 of this
Agreement shall apply to provisions of this Chapter.

5.           Where the number of licences
available for a given activity is limited because of the scarcity of available
natural resources or technical capacity, the Parties shall apply a selection
procedure to potential candidates which provides full guarantees of
impartiality and transparency, including, in particular, adequate publicity
about the launch, conduct and completion of the procedure.

6.           Subject to the provisions
specified by this Article, in establishing the rules for the selection
procedure, the Parties may take into account legitimate public policy
objectives, including considerations of health, safety, the protection of the
environment and preservation of cultural heritage.

Article 105

Licensing procedures

1.           Licensing procedures and
formalities shall be clear, made public in advance and be such as to provide
the applicants with a guarantee that their application will be dealt with
objectively and impartially.

2.           Licensing procedures and
formalities shall be as simple as possible and shall not unduly complicate or
delay the provision of the service. Any licensing fees[30] which the applicants may incur
as a result of their application shall be reasonable and proportionate to the
cost of the licensing procedures in question.

3.           Licensing procedures and
formalities shall provide applicants with a guarantee that their application
will be processed within a reasonable period which is made public in advance.
The period shall run only from the time when all documentation has been
received by the competent authorities. When justified by the complexity of the
issue, the time period may be extended, by the competent authority, for a
reasonable time. The extension and its duration shall be duly motivated and
shall be notified to the applicant before the original period has expired.

4.           In the case of an
incomplete application, the applicant shall be informed as quickly as possible
of the need to supply any additional documentation. In this case, the period
referred to in paragraph 3 of this Article may be suspended by the competent
authorities, until all documentation has been received by the competent
authorities.

5.           If an application for a
licence is rejected, the applicant should be informed without undue delay. In
principle, the applicant shall, upon request, be informed of the reasons for
rejection of the application and of the timeframe for an appeal against the
decision.

Sub-section
2

Provisions
of General Application

Article 106

Mutual
recognition

1.           Nothing in this Chapter
shall prevent a Party from requiring that natural persons must possess the
necessary qualifications and/or professional experience specified in the
territory where the service is supplied, for the sector of activity concerned.

2.           The Parties shall
encourage the relevant professional bodies in their respective territories to provide
recommendations on mutual recognition to the Trade Committee, for the purpose
of fulfilment, in whole or in part, by investors and service suppliers of the
criteria applied by each Party for the authorisation, licensing, operation and
certification of investors and service suppliers and, in particular,
professional services.

3.           On receipt of a
recommendation as referred to in paragraph 2 of this Article, the Trade
Committee shall, within a reasonable time, review the recommendation with a
view to determining whether it is consistent with this Agreement.

4.           When, in conformity with
the procedure set out in paragraph 3 of this Article, a recommendation as referred
to in paragraph 2 of this Article has been found to be consistent with this
Agreement and there is a sufficient level of correspondence between the
relevant regulations of the Parties, the Parties shall, with a view to
implementing that recommendation, negotiate, through their competent
authorities, an agreement on the mutual recognition of requirements,
qualifications, licences and other regulations.

5.           Any such agreement shall
be in conformity with the relevant provisions of the WTO Agreement and, in
particular, Article VII of the GATS.

Article 107

Transparency
and disclosure of confidential information

1.           Each Party shall respond
promptly to all requests by the other Party for specific information on any of
its measures of general application or international agreements which pertain
to or affect this Agreement. Each Party shall also establish one or more
enquiry points to provide specific information to investors and services
suppliers of the other Party, upon request, on all such matters. The Parties
shall notify each other of their enquiry points within three months after entry
into force of this Agreement. Enquiry points need not be depositories of laws
and regulations.

2.           Nothing in this Agreement
shall require any Party to provide confidential information, the disclosure of
which would impede law enforcement, or otherwise be contrary to the public
interest or which would prejudice legitimate commercial interests of particular
enterprises, whether public or private.

Sub-section 3

Computer Services

Article 108

Understanding
on computer services

1.           To the extent that trade
in computer services is liberalised in accordance with Sections 2, 3 and 4 of
this Chapter and taking into account the fact that computer and related
services enable the provision of other services by both electronic and other
means, the Parties shall distinguish between an enabling service and the
content or core services that is being delivered electronically in such a way
that the content or core service is not classified as a computer and related
service, as defined in paragraph 2 of this Article.

2.           Computer and related services
shall mean services defined in the United Nations Code CPC 84 including both
basic services and functions or combinations of basic services, regardless of
whether they are delivered via a network, including the Internet.

Basic services are all services that provide:

(a)     consulting, strategy, analysis,
planning, specification, design, development, installation, implementation,
integration, testing, debugging, updating, support, technical assistance, or
management of or for computers or computer systems; or

(b)     computer programs defined as the set
of instructions required to make computers work and communicate (in and of
themselves), plus consulting, strategy, analysis, planning, specification,
design, development, installation, implementation, integration, testing,
debugging, updating, adaptation, maintenance, support, technical assistance, and
management or use of or for computer programs; or

(c)     data processing, data storage, data
hosting or database services; or

(d)     maintenance and repair services for
office machinery and equipment, including computers; or

(e)     training services for staff of
clients, related to computer programs, computers or computer systems, and not
elsewhere classified.

Sub-section
4

Postal
and Courier Services

Article 109

Scope
and definitions

1.           This Sub-section sets out
the principles of the regulatory framework for all postal and courier services
liberalised in accordance with Sections 2, 3 and 4 of this Chapter.

2.           For the purpose of this
Sub-section and of Sections 2, 3 and 4 of this Chapter:

(a)     a “licence” means an authorisation,
granted to an individual supplier by a regulatory authority, which is required
before carrying out the activity of supplying a given service;

(b)     "universal service" means
the permanent provision of a postal service of specified quality at all points
in the territory of a Party at affordable prices for all users.

Article 110

Prevention
of anti-competitive practices in the postal and courier sector

Appropriate measures shall be maintained or
introduced for the purpose of preventing suppliers who, alone or together, have
the ability to affect materially the terms of participation (having regard to
price and supply) in the relevant market for postal and courier services as a
result of use of their position in the market, from engaging in or continuing
anti-competitive practices.

Article 111

Universal
service

Any Party has the right to define the kind
of universal service obligation it wishes to maintain. Such obligations will
not be regarded as anti-competitive per se, provided they are
administered in a transparent, non-discriminatory and competitively neutral
manner and are not more burdensome than necessary for the kind of universal
service defined by the Party.

Article 112

Licences

1.           Three years after the entry
into force of this Agreement, a licence may only be required for services which
are within the scope of the universal service.

2.           Where a licence is
required, the following shall be made publicly available:

(a)     all the licensing criteria and the
period of time normally required to reach a decision concerning an application
for a licence; and

(b)     the terms and conditions of licences.

3.           The
reasons for denial of a licence shall be made known to the applicant upon
request and an appeal procedure through an independent body will be established
by each Party. Such a procedure will be transparent, non-discriminatory, and
based on objective criteria.

Article 113

Independence
of the regulatory body

The regulatory body
shall be legally separate from and not accountable to any supplier of postal
and courier services. The decisions of and the procedures used by the
regulatory body shall be impartial with respect to all market participants.

Article 114

Regulatory
approximation

1.           The Parties recognise the
importance of the approximation of Ukraine's existing legislation to that of
the European Union. Ukraine shall ensure that its existing laws and future
legislation will be gradually made compatible with the EU acquis.

2.           Such approximation will
start on the date of signing of this Agreement, and will gradually extend to
all the elements of the EU acquis referred to in Annex XVII to this
Agreement.

Sub-section
5

Electronic communications

Article 115

Scope
and definitions

1.           This Sub-section sets out
the principles of the regulatory framework for all electronic
communication services liberalised pursuant to Sections 2, 3 and 4 of this
Chapter excluding broadcasting.

2.           For the purposes of this
Sub-section and Sections 2, 3 and 4 of this Chapter:

(a)     "electronic communication services"
means all services that consist of the transmission and reception of
electro-magnetic signals and are normally provided for remuneration, excluding
broadcasting, which does not cover the economic activity consisting in the provision
of content that requires telecommunications for its transport. Broadcasting is
defined as the uninterrupted chain of transmission required for the
distribution of television and radio programme signals to the general public,
but does not cover contribution links between operators;

(b)     "public communication
network" means an electronic communication network used wholly or mainly
for the provision of publicly available electronic communication services;

(c)     "electronic communication
network" means transmission systems and, where applicable, switching or
routing equipment and other resources which permit the conveyance of signals by
wire, by radio, by optical or by other electromagnetic means, including
satellite networks, fixed (circuit- and packet-switched, including Internet)
and mobile terrestrial networks, and electricity cable systems, to the extent
that they are used for the purpose of transmitting signals, networks used for
radio and television broadcasting, and cable television networks, irrespective
of the type of information conveyed;

(d)     a "regulatory authority" in the electronic communication
sector means the body or bodies charged with the regulation of electronic
communication mentioned in this Chapter;

(e)     a service supplier shall be deemed to
have "significant market power" if, either individually or jointly
with others, it enjoys a position equivalent to dominance, that is to say a
position of economic strength affording it the power to behave to an
appreciable extent independently of competitors, customers and ultimately
consumers;

(f)      "interconnection" means the
physical and/or logical linking of public communication networks used by the
same or a different service supplier in order to allow the users of one service
supplier to communicate with users of the same or another service supplier, or
to access services provided by another service supplier. Services may be
provided by the parties involved or other parties who have access to the
network. Interconnection is a specific type of access implemented between
public network operators;

(g)     "universal service" means
the set of services of specified quality that is made available to all users in
the territory of a Party regardless of their geographical location and at an
affordable price; its scope and implementation are decided by each Party;

(h)     "access" means the making
available of facilities and/or services, to another service supplier, under
defined conditions, on either an exclusive or non-exclusive basis, for the
purpose of providing electronic communication services. It covers, inter
alia, access to network elements and associated facilities, which may involve
the connection of equipment by fixed or non-fixed means (in particular this
includes access to the local loop and to facilities and services necessary to
provide services over the local loop), access to physical infrastructure
including buildings, cable ducts, and masts; access to relevant software
systems including operational support systems, access to numbering translation
or systems offering equivalent functionality, access to fixed and mobile
networks, in particular for roaming, access to conditional access systems for
digital televisions services, access to virtual network services;

(i)      "end-user" means a user not
providing public communication networks or publicly available electronic
communication services;

(j)      "local loop" means the
physical circuit connecting the network termination point at the subscriber's
premises to the main distribution frame or equivalent facility in the fixed
public communication network.

Article 116

Regulatory
authority

1.           The Parties shall ensure
that regulatory authorities for electronic communication services are legally
distinct and functionally independent from any service supplier of electronic
communication services. If a Party retains ownership or control of a service
supplier providing public communication networks or services, such Party shall
ensure the effective structural separation of the regulatory function from
activities associated with ownership or control.

2.           The Parties shall ensure
that the regulatory authority is sufficiently empowered to regulate the sector.
The tasks to be undertaken by a regulatory authority shall be made public in an
easily accessible and clear form, in particular where those tasks are assigned
to more than one body.

3.           The Parties shall ensure
that the decisions of and the procedures used by the regulatory authorities are
impartial with respect to all market participants and transparent.

4.           The regulatory authority
shall have the power to carry out an analysis of the indicative list of
relevant product and service markets included in the Annexes[31] to this Agreement. Where the
regulatory authority is required to determine under Article 118 of this
Agreement whether to impose, maintain, amend or withdraw obligations it shall
determine on the basis of a market analysis whether the relevant market is
effectively competitive.

5.           Where the regulatory
authority determines that a relevant market is not effectively competitive, it
shall identify and designate service suppliers with significant market power on
that market and shall impose, maintain or amend specific regulatory obligations
referred to in Article 118 of this Agreement as it is appropriate. Where the
regulatory authority concludes that the market is effectively competitive it
shall not impose or maintain any of the regulatory obligations referred to in
Article 118 of this Agreement.

6.           The Parties shall ensure
that a service supplier affected by the decision of a regulatory authority
shall have a right to appeal against that decision to an appeal body that is
independent of the parties involved in the decision. The Parties shall ensure
that the merits of the case are duly taken into account. Pending the outcome of
any such appeal, the decision of the regulator shall stand, unless the appeal
body decides otherwise. Where the appeal body is not judicial in character,
written reasons for its decision shall always be given and its decisions shall
also be subject to review by an impartial and independent judicial authority.
Decisions taken by appeal bodies shall be effectively enforced.

7.           The Parties shall ensure
that where the regulatory authorities intend to take measures related to any of
the provisions of this Sub-section and which have a significant impact on the
relevant market, they give the interested parties the opportunity to comment on
the draft measure within a reasonable period of time. Regulators shall publish
their consultation procedures. The results of the consultation procedure shall
be made publicly available except in the case of confidential information.

8.           The Parties shall ensure
that service suppliers providing electronic communication networks and services
provide all the information, including financial information, necessary for
regulatory authorities to ensure conformity with the provisions of this Sub-section
or decisions made in accordance with this Sub-section. These service suppliers
shall provide such information promptly on request and to the timescales and
level of detail required by the regulatory authority. The information requested
by the regulatory authority shall be proportionate to the performance of that
task. The regulatory authority shall give the reasons justifying its request
for information.

Article 117

Authorisation
to provide electronic communication services

1.           The Parties shall ensure
that the provision of services is authorised, as much as possible, following
mere notification and/or registration.

2.           The Parties shall ensure
that a licence can be required to address issues of attributions of numbers and
frequencies. The terms and conditions for such licences shall be made publicly
available.

3.           The Parties shall ensure
that where a licence is required:

(a)     all the licensing criteria and a
reasonable period of time normally required to reach a decision concerning an
application for a licence are made publicly available;

(b)     the reasons for the denial of a
licence are made known in writing to the applicant upon request;

(c)     the applicant of a licence is able to
seek recourse before an appeal body in case that a licence is unduly denied;

(d)     licence fees[32] required by any Party for
granting a licence do not exceed the administrative costs normally incurred in
the management, control and enforcement of the applicable licences. Licence
fees for the use of radio spectrum and numbering resources are not subject to
the requirements of this paragraph (d).

Article 118

Access and interconnection

1.           The Parties shall ensure
that any service supplier authorised to provide electronic communication
services has the right and obligation to negotiate interconnection with other
providers of publicly available electronic communications networks and services.
Interconnection should in principle be agreed on the basis of commercial
negotiation between the legal persons concerned.

2.           The Parties shall ensure
that service suppliers that acquire information from another service supplier
during the process of negotiating interconnection arrangements use that
information solely for the purpose for which it was supplied and respect at all
times the confidentiality of information transmitted or stored.

3.           The
Parties shall ensure that upon the finding in accordance with Article 116 of
this Agreement that a relevant market, including those in the attached Annexes
to this Agreement, is not effectively competitive, the regulatory authority has
the power to impose on the service supplier designated as having significant
market power one or more of the following obligations in relation to
interconnection and/or access:

(a)     obligation of non-discrimination to
ensure that the operator applies equivalent conditions in equivalent
circumstances to other service suppliers providing equivalent services, and
provides services and information to others under the same conditions and of
the same quality as it provides for its own services, or those of its
subsidiaries or partners;

(b)     obligation on a vertically integrated
company to make transparent its wholesale prices and its internal transfer
prices, where there is a requirement for non-discrimination or for prevention
of unfair cross-subsidy. The regulatory authority may specify the format and
accounting methodology to be used;

(c)     obligations to meet reasonable requests
for access to, and use of, specific network elements and associated facilities
including unbundled access to the local loop, inter alia, in situations
where the regulatory authority considers that denial of access or unreasonable
terms and conditions having a similar effect would hinder the emergence of a
sustainable competitive market at the retail level, or would not be in the end-user's
interest;

(d)     obligation to provide specified
services on a wholesale basis for resale by third parties; to grant open access
to technical interfaces, protocols or other key technologies that are
indispensable for the interoperability of services or virtual network services;
to provide co-location or other forms of facility sharing, including cable
duct, building or mast sharing; to provide specified services needed to ensure
interoperability of end-to-end services to users, including facilities for
intelligent network services; to provide access to operational support systems
or similar software systems necessary to ensure fair competition in the
provision of services; to interconnect networks or network facilities.

Regulatory authorities may attach conditions
including fairness, reasonableness and timeliness to the obligations included
under points (c) and (d) of this paragraph;

(e)     obligations relating to cost recovery
and price controls, including obligations for cost orientation of prices and
obligations concerning cost accounting systems, for the provision of specific
types of interconnection and/or access, in situations where a market analysis
indicates that a lack of effective competition means that the operator
concerned might sustain prices at an excessively high level, or apply a price
squeeze, to the detriment of end-users;

Regulatory authorities shall take into account
the investment made by the operator and allow him a reasonable rate of return
on adequate capital employed.

(f)      obligation to publish the specific
obligations imposed on a service supplier by the regulatory authority
identifying the specific product/service and geographical markets. Up-to-date
information, provided that it is not confidential and does not comprise
business secrets is to be made publicly available in a manner that guarantees
all interested parties easy access to that information;

(g)     obligations of transparency requiring
operators to make public specified information and in particular, where an
operator has obligations of non-discrimination, the regulator may require that
operator to publish a reference offer, which shall be sufficiently unbundled to
ensure that service suppliers are not required to pay for facilities which are
not necessary for the service requested, giving a description of the relevant
offerings broken down into components according to market needs, and the
associated terms and conditions including prices.

4.           The Parties shall ensure
that a service supplier requesting interconnection with an service supplier
designated as having significant market power shall have recourse, either at any time or after a reasonable period of time which
has been made publicly known, to an independent domestic body, which may be a
regulatory body as referred to in Article 115(2)(d) of this Agreement, to
resolve disputes regarding terms and conditions for interconnection and/or access.

Article 119

Scarce
resources

1.           The Parties shall ensure
that any procedures for the allocation and use of scarce resources, including
frequencies, numbers and rights of way, shall be carried out in an objective,
proportionate, timely, transparent and non-discriminatory manner. The current
state of allocated frequency bands shall be made publicly available, but
detailed identification of frequencies allocated for specific government uses
is not required.

2.           The Parties shall ensure
the effective management of radio frequencies for telecommunications services
in their territory with a view to ensuring effective and efficient use of the
spectrum. Where demand for specific frequencies exceeds their availability,
appropriate and transparent procedures shall be followed for the assignment of
these frequencies in order to optimize their use and facilitate the development
of competition.

3.           The Parties shall ensure
that the assignment of national numbering resources and the management of national
numbering plans are entrusted to the regulatory authority.

4.           Where
public or local authorities retain ownership or control of service suppliers
operating public communications networks and/or services, effective structural
separation needs to be ensured between the function responsible for granting
the rights of way from activities associated with ownership or control.

Article 120

Universal service

1.           Each
Party has the right
to define the kind of universal service obligations it wishes to maintain.

2.           Such obligations will not
be regarded as anti-competitive per se, provided they are administered
in a transparent, objective and non-discriminatory way. The administration of
such obligations shall also be neutral with respect to competition and be not
more burdensome than necessary for the kind of universal service defined by the
Party.

3.           The Parties shall ensure
that all service suppliers should be eligible to ensure universal service and no service supplier shall be a priori excluded. The designation shall be made through an efficient,
transparent, objective and non-discriminatory mechanism. Where necessary,
Parties shall assess whether the provision of universal service represents an
unfair burden on organisations(s) designated to provide universal service.
Where justified on the basis of such calculation, and taking into account the
market benefit if any which accrues to an organisation that offers universal
service, regulatory authorities shall determine whether a mechanism is required
to compensate the service supplier(s) concerned or to share the net cost of
universal service obligations.

4.           The Parties shall ensure
that:

(a)     directories of all subscribers[33] are available to users,
whether printed or electronic, or both, and are updated on a regular basis, and
at least once a year;

(b)     organisations that provide the
services referred to in paragraph (a) apply the principle of non-discrimination
to the treatment of information that has been provided to them by other
organisations.

Article 121

Cross-border
provision of electronic communication services

The Parties shall not adopt or maintain any
measure restricting the cross-border provision of electronic communication
services.

Article 122

Confidentiality
of information

Each Party
shall ensure the confidentiality of electronic communication and related
traffic data by means of a public electronic communication network and publicly
available electronic communication services without restricting trade in
services.

Article 123

Disputes
between service suppliers

1.           The Parties shall ensure
that in the event of a dispute arising between service
suppliers of electronic communication networks or services in connection
with rights and obligations referred to in this Chapter, the regulatory
authority concerned shall, at the request of either Party, issue a binding
decision to resolve the dispute in the shortest possible timeframe and in any
case within four months.

2.           The decision of the
regulatory authority shall be made available to the public, having regard to
the requirements of business confidentiality. The parties concerned shall be
given a full statement of the reasons on which it is based.

3.           When such a dispute
concerns the cross-border provision of services, the regulatory authorities
concerned shall co-ordinate their efforts in order to bring about a resolution
of the dispute.

Article 124

Regulatory
approximation

1.           The Parties recognise the
importance of the approximation of Ukraine's existing legislation to that of
the European Union. Ukraine shall ensure that its existing laws and future
legislation will be gradually made compatible with the EU acquis.

2.           Such approximation will
start on the date of signing of this Agreement, and will gradually extend to
all the elements of the EU acquis referred to in Annex XVII to this
Agreement.

Sub-section
6

Financial
Services

Article 125

Scope
and definitions

1.           This Sub-section sets out
the principles of the regulatory framework for all financial services
liberalised pursuant to Sections 2, 3 and 4 of this Chapter.

2.           For the purposes of this
Sub-section and of Sections 2, 3 and 4 of this Chapter:

(a)     "financial service" means
any service of a financial nature offered by a financial service supplier of a
Party. Financial services include the following activities:

(i)      Insurance and insurance-related
services

1.       direct insurance (including
co-insurance):

(a)     life;

(b)     non-life.

2.       reinsurance and retrocession;

3.       insurance intermediation, such as
brokerage and agency; and

4.       services auxiliary to insurance, such
as consultancy, actuarial, risk assessment and claim settlement services.

(ii)      Banking and other financial services
(excluding insurance):

1.       acceptance of deposits and other
repayable funds from the public;

2.       lending of all types, including
consumer credit, mortgage credit, factoring and financing of commercial
transactions;

3.       financial leasing;

4.       all payment and money transmission
services, including credit, charge and debit cards, travellers cheques and
bankers drafts;

5.       guarantees and commitments;

6.       trading for own account or for
account of customers, whether on an exchange, in an over-the-counter market or
otherwise, the following:

(a)     money market instruments (including
cheques, bills, certificates of deposit);

(b)     foreign exchange;

(c)     derivative products including, but not
limited to, futures and options;

(d)     exchange rate and interest rate
instruments, including products such as swaps and forward rate agreements;

(e)     transferable securities;

(f)      other negotiable instruments and
financial assets, including bullion.

7.       participation in issues of all kinds
of securities, including underwriting and placement as agent (whether publicly
or privately) and provision of services related to such issues;

8.       money broking;

9.       asset management, such as cash or
portfolio management, all forms of collective investment management, pension
fund management, custodial, depository and trust services;

10.     settlement and clearing services for
financial assets, including securities, derivative products, and other
negotiable instruments;

11.     provision and transfer of financial
information, and financial data processing and related software;

12.     advisory, intermediation and other
auxiliary financial services concerning all the activities listed in
subparagraphs (1) to (11), including credit reference and analysis, investment
and portfolio research and advice, advice on acquisitions and on corporate
restructuring and strategy.

(b)     "financial service supplier"
means any natural or legal person of a Party that seeks to provide or provides
financial services. The term "financial service supplier" does not
include a public entity.

(c)     "public entity" means:

1.       a government, central bank or a
monetary authority, of a Party, or an entity owned or controlled by a Party,
which is principally engaged in carrying out governmental functions or
activities for governmental purposes, not including an entity principally
engaged in supplying financial services on commercial terms; or

2.       a private entity, performing
functions normally performed by a central bank or monetary authority, when
exercising those functions.

(d)     "new financial service"
means a service of a financial nature, including services related to existing
and new products or the manner in which a product is delivered, which is not
supplied by any financial service supplier in the territory of a Party but
which is supplied in the territory of the other Party.

Article 126

Prudential
carve-out

1.           Each Party may adopt or
maintain measures for prudential reasons, such as:

(a)     the protection of investors,
depositors, policy-holders or persons to whom a fiduciary duty is owed by a
financial service supplier;

(b)     ensuring the integrity and stability
of a Party's financial system.

2.           These measures shall not
be more burdensome than necessary to achieve their aim, and shall not
discriminate against financial service suppliers of the other Party in
comparison to its own like financial service suppliers.

3.           Nothing in this Agreement
shall be construed to require a Party to disclose information relating to the affairs
and accounts of individual consumers or any confidential or proprietary
information in the possession of public entities.

4.           Without prejudice to other
means of prudential regulation of cross-border trade in financial services, a
Party may require the registration of cross-border financial service suppliers
of the other Party and of financial instruments.

Article 127

Effective
and transparent regulation

1.           Each Party shall make its
best endeavours to provide in advance to all interested persons any measure of
general application that the Party proposes to adopt in order to allow such
persons an opportunity to comment on the measure. Such measure shall be
provided:

(a)     by means of an official publication;
or

(b)     in other written or electronic form.

2.           Each Party shall make
available to all interested persons its requirements for completing
applications relating to the supply of financial services.

On the request of an applicant, the concerned
Party shall inform the applicant of the status of its application. If the
concerned Party requires additional information from the applicant, it shall
notify the applicant without undue delay.

Each
Party shall make its best endeavours to ensure that internationally agreed
standards for regulation and supervision in the financial services sector and for the fight against tax evasion and
avoidance are
implemented and applied in its territory. Such internationally agreed standards
are, inter alia, the Basel Committee's “Core Principle for Effective
Banking Supervision”, the International Association of Insurance Supervisors'
“Insurance Core Principles”, the International
Organisation of Securities Commissions' “Objectives and Principles of
Securities Regulation”, the OECD's “Agreement on exchange of information on tax matters” the G20
“Statement on Transparency and exchange of information for tax purposes” and
the Financial Action Task Force's “Forty Recommendations on Money Laundering”
and "Nine Special Recommendations on Terrorist Financing".

The
Parties also take note of the Ten Key Principles for Information
Exchange promulgated by the Finance Ministers of the G7 Nations, and will take
all steps necessary to try to apply them in their bilateral contacts.

Article 128

New
financial services

Each Party shall permit a financial service
supplier of the other Party established in the territory of that Party to
provide any new financial service of a type similar to those services that the
Party would permit its own financial service suppliers to provide under its
domestic law in like circumstances. A Party may determine the juridical form
through which the service may be provided and may require authorisation for the
provision of the service. Where such authorisation is required, a decision
shall be made within a reasonable time and the authorisation may only be
refused for the reasons set out in Article 126 of this Agreement.

Article 129

Data
processing

1.           Each Party shall permit a
financial service supplier of the other Party to transfer information in
electronic or other form, into and out of its territory, for data processing
where such processing is required in the ordinary course of business of such
financial service supplier.

2.           Each Party shall adopt
adequate safeguards for the protection of privacy and fundamental rights and
the freedom of individuals, in particular with regard to the transfer of
personal data.

Article 130

Specific
exceptions

1.           Nothing in this Chapter
shall be construed in such a way as to prevent a Party, including its public
entities, from exclusively conducting or providing in its territory activities
or services forming part of a public retirement plan or statutory system of
social security, except when those activities may be carried out, as provided
by the Party's domestic regulation, by financial service suppliers in
competition with public entities or private institutions.

2.           Nothing in this Agreement
applies to activities conducted by a central bank or monetary authority or by
any other public entity in pursuit of monetary or exchange rate policies.

3.           Nothing in this Chapter
shall be construed in such a way as to prevent a Party, including its public
entities, from exclusively conducting or providing in its territory activities
or services for the account of, or with the guarantee or using the financial
resources of the Party, or its public entities.

Article 131

Self-regulatory
organisations

When a Party requires membership of or
participation in, or access to, any self-regulatory body, securities or futures
exchange or market, clearing agency, or any other organisation or association,
in order for financial service suppliers of the other Party to supply financial
services on an equal basis with financial service suppliers of the Party, or
when the Party provides directly or indirectly such entities, privileges or
advantages in supplying financial services, the Party shall ensure observance
of the obligations under Articles 88 and 94 of this Agreement.

Article 132

Clearing
and payment systems

Under terms and conditions that accord
national treatment, each Party shall grant to financial service suppliers of
the other Party established in its territory access to payment and clearing
systems operated by public entities, and to official funding and refinancing
facilities available in the normal course of ordinary business. This Article is
not intended to confer access to the Party's lender of last resort facilities.

Article 133

Regulatory
approximation

1.           The Parties recognise the
importance of the approximation of Ukraine's existing legislation to that of
the European Union. Ukraine shall ensure that its existing laws and future
legislation will be gradually made compatible with the EU acquis.

2.           Such approximation will
start on the date of signing of this Agreement, and will gradually extend to
all the elements of the EU acquis referred to in Annex XVII to this
Agreement.

Sub-section 7

Transport Services

Article 134

Scope

This Sub-section sets out the principles
regarding the liberalisation of transport services pursuant to Sections 2, 3
and 4 of this Chapter.

Article 135

International
maritime transport

1.           This Agreement applies to international maritime transport between
the ports of Ukraine and of the Member States of the European Union and between
the ports of the Member States of the European Union. It also applies to trades
between the ports of Ukraine and third countries and between the ports of the
Member States of the European Union and third countries.

2.           This Agreement shall not
apply to domestic maritime transport between the ports of Ukraine or between
the ports of individual Member States of the European Union. Notwithstanding
the previous sentence, the movement of equipment, such as empty containers, not
being carried as cargo against payment between the ports of Ukraine or between
the ports of individual Member States of the European Union shall be regarded
as a part of international maritime transport.

3.           For
the purposes of this Sub-section and Sections 2, 3 and 4 of this Chapter:

(a)     "international maritime
transport" includes door to door and multi-modal transport operations,
which is the carriage of goods using more than one mode of transport, involving
a sea-leg, under a single transport document, and to this effect direct
contracting with providers of other modes of transport;

(b)     "maritime
cargo handling services" means activities exercised by stevedore
companies, including terminal operators, but not including the direct
activities of dockers, when this workforce is organised independently of the
stevedoring or terminal operator companies. The activities covered include the
organisation and supervision of:

(i)      the loading/discharging of cargo
to/from a ship;

(ii)      the lashing/unlashing of cargo;

(iii)     the reception/delivery and
safekeeping of cargoes before shipment or after discharge;

(c)     "customs
clearance services" (alternatively "customs house brokers'
services") means activities consisting in carrying out on behalf of another party
customs formalities concerning import, export or through transport of cargoes,
whether this service is the main activity of the service provider or a usual
complement of its main activity;

(d)     "container
station and depot services" means activities consisting in storing
containers, whether in port areas or inland, with a view to their
stuffing/stripping, repairing and making them available for shipments;

(e)     "maritime
agency services" means activities consisting in representing, within a
given geographic area, as an agent the business interests of one or more
shipping lines or shipping companies, for the following purposes:

(i)      marketing and sales of maritime
transport and related services, from quotation to invoicing, and issuance of
bills of lading on behalf of the companies, acquisition and resale of the
necessary related services, preparation of documentation, and provision of
business information;

(ii)      acting on behalf of the companies
organising the call of the ship or taking over cargoes when required.

(f)      "freight forwarding services" means
the activity consisting of organising and monitoring shipment operations on behalf of shippers, through the acquisition
of transport and related services, preparation of documentation and provision
of business information.

(g)     "feeder
services" means the pre- and onward transportation of international
cargoes by sea, notably containerised, between ports located in a
Party.

4.           Each Party shall grant to
vessels flying the flag of the other Party or operated by service suppliers of
the other Party treatment no less favourable than that accorded to its own
vessels, or those of any third country, whichever are the better, with regard
to, inter alia, access to ports, the use of infrastructure
and services of ports, and the use of maritime auxiliary services[34], as well as
related fees and charges, customs facilities and the assignment of berths and
facilities for loading and unloading.

5.           The Parties shall apply
effectively the principle of unrestricted access to the international maritime
markets and trades on a commercial and non‑discriminatory basis.

6.           In applying the principles
of paragraphs 4 and 5 of this Article, the Parties shall, upon entry
into force of this Agreement:

(a)     not introduce
cargo sharing arrangements in future agreements with third countries concerning
maritime transport services, including dry
and liquid bulk and liner trade, and terminate such cargo sharing
arrangements in the case they exist in previous agreements; and

(b)     abolish or abstain from implementing
any administrative, technical, or other measures, which
could constitute an indirect restriction and have discriminatory effects
against nationals or companies of the other Party in the supply of services in
international maritime transport.

7.           Each Party shall permit
international maritime transport service suppliers of the other Party to have
establishments in its territory under conditions of establishment and operation
no less favourable than those accorded to its own service suppliers or those of
any third country, whichever are the better. In
accordance with the provisions of Section 2 of this Chapter, in respect of the
activities of such establishments, each Party shall permit the service
suppliers of the other Party, in accordance with its laws and regulations, to
engage in economic activities, such as, but not limited to:

(a)     publishing, marketing and sales of
maritime transport and related services, from quotation to invoicing, on their
own account or on behalf of other service suppliers of international maritime
transport, through direct contact with customers;

(b)     provision of business information by
any means, including computerised information systems and electronic data
interchange (subject to any non-discriminatory restrictions concerning
telecommunications);

(c)     preparation of documentation
concerning transport and customs and other documents related to the origin and
character of what is being transported;

(d)     organising the call of vessels or
taking delivery of cargoes on their own account or on behalf of other service
suppliers of international maritime transport;

(e)     setting up of any business arrangement
with any locally established shipping agency, including participation in the
company's stock and the appointment of personnel recruited locally or recruited
from abroad subject to the relevant provisions of this Agreement;

(f)      purchase and use, on their own
account or on behalf of their customers (and the resale to their customers), of
transport services by all modes, including inland waterways, road and rail, and
services auxiliary to all modes of transport, necessary for the supply of an
integrated transport service;

(g)     owning the equipment necessary for
conducting economic activities.

8.           Each Party shall make
available to service suppliers of international maritime transport of the other
Party on reasonable and non-discriminatory terms and conditions the following
services at the port: pilotage, towing and tug assistance, provisioning,
fuelling and watering, garbage collecting and ballast waste disposal, port
captain’s services, navigation aids, shore-based operational services essential
to ship operations, including communications, water and electrical supplies,
emergency repair facilities, anchorage, berth and berthing services.

9.           Each Party shall allow
services suppliers of international maritime transport of the other Party to
provide international maritime transport services involving a sea-leg in the inland waterways of the other Party.

10.         Each Party shall allow
services suppliers of international maritime transport of the other Party to
have use of, on a non-discriminatory basis and on agreed terms between the
companies concerned, feeder services between the ports of Ukraine or between
the ports of individual Member States of the European Union that are provided
by the service suppliers of maritime transport registered in the former Party.

11.         This Agreement shall not
affect the application of the maritime agreements concluded between Ukraine and
the Member States of the European Union for issues falling outside the scope of
this Agreement. If this Agreement is less favourable on certain issues than
existing agreements between individual Member States of the European Union and
Ukraine, the more favourable provisions shall prevail without prejudice to EU
Party obligations and taking into account the Treaty on the Functioning of the
European Union. The provisions of this Agreement replace those of previous
bilateral agreements concluded between Member States of the European Union and
Ukraine, if the latter provisions are either inconsistent with the former
except for the situation referred to in the preceding sentence, or identical to
them. Provisions of existing bilateral agreements not covered by this Agreement
shall continue to apply.

Article 136

Road,
rail and inland waterways transport

1.           With a view to assuring a
coordinated development and progressive liberalisation of transport between the
Parties adapted to their reciprocal commercial needs, the conditions of mutual
market access in road, rail and inland waterways transport shall be dealt
with by possible future special road, rail and inland waterways transport
agreements.

2.           Prior to the conclusion of
the agreements referred to in paragraph 1 of this Article, the Parties shall not render the conditions of mutual
market access more restrictive between the Parties as compared to the situation
existing on the day preceding the day of entry into force of this Agreement.

3.           The provisions of existing
bilateral agreements which are not covered by future possible agreements
referred to in paragraph 1 of this Article shall continue to apply.

Article 137

Air
transport

1.           With
a view to ensuring a coordinated development and progressive liberalisation of
transport between the Parties adapted to their reciprocal commercial needs, the
conditions of mutual market access in air transport should be dealt in
accordance with the EU-Ukraine Common Aviation Area Agreement (hereinafter
referred to as the "CAA").

2.           Prior
to the conclusion of the CAA, the Parties shall not take any measures or
actions which are more restrictive or discriminatory as compared with the
situation existing prior to the entry into force of this Agreement.

Article 138

Regulatory
approximation

Ukraine shall
adapt its legislation, including administrative, technical and other rules, to
that of the EU Party existing at any time in the field of international
maritime transport insofar as it serves to achieve the objectives of
liberalisation, mutual access to the markets of the Parties, and the movement
of passengers and of goods. This approximation will
start on the date of signing of the Agreement, and will gradually extend to all
the elements of the EU acquis referred to in Annex XVII to this
Agreement.

Section
6

Electronic
Commerce

Article 139

Objective
and principles

1.           The Parties, recognising
that electronic commerce increases trade opportunities in many sectors, agree
to promote the development of electronic commerce between them, in particular
by co-operating on the issues raised by electronic commerce under the
provisions of this Chapter.

2.           The Parties agree that the
development of electronic commerce must be fully compatible with the highest
international standards of data protection, in order to ensure the confidence
of users of electronic commerce.

3.           The Parties agree that
electronic transmissions shall be considered as the provision of services,
within the meaning of Section 3 (Cross-border supply of services) of this
Chapter, which cannot be subject to customs duties.

Article 140

Regulatory
aspects of electronic commerce

1.           The Parties shall maintain
a dialogue on regulatory issues raised by electronic commerce, which will inter
alia address the following issues:

(a)     the recognition of certificates of
electronic signatures issued to the public and the facilitation of cross-border
certification services,

(b)     the liability of intermediary service
providers with respect to the transmission or storage of information,

(c)     the treatment of unsolicited
electronic commercial communications,

(d)     the protection of consumers within the
ambit of electronic commerce,

(e)     any other issue relevant to the
development of electronic commerce.

2.           Such cooperation can take
the form of exchange of information on the Parties’ respective legislation on
these issues as well as on the implementation of such legislation.

Section 7

Exceptions

Article 141

General
exceptions

1            Without prejudice to
general exceptions set out in Articles 472 of this Agreement, the provisions of
this Chapter and of Annexes XVI-A, XVI-B, XVI-C, XVI-D, XVI-E, XVI-F and XVII
to this Agreement are subject to the exceptions contained in this Article.

2.           Subject to the requirement
that such measures are not applied in a manner which would constitute a means
of arbitrary or unjustifiable discrimination between countries where like
conditions prevail, or a disguised restriction on establishment or cross-border
supply of services, nothing in this Chapter shall be construed in such a way as
to prevent the adoption or enforcement by any Party of measures:

(a)     necessary to protect public security
or public morals or to maintain public order;

(b)     necessary to protect human, animal or
plant life or health;

(c)     relating to the conservation of
exhaustible natural resources if such measures are applied in conjunction with
restrictions on domestic investors or on the domestic supply or consumption of
services;

(d)     necessary for the protection of
national treasures of artistic, historic or archaeological value;

(e)     necessary to secure compliance with
laws or regulations which are not inconsistent with the provisions of this
Chapter including those relating to:

(i)      the prevention of deceptive and
fraudulent practices or to deal with the effects of a default on contracts;

(ii)      the protection of the privacy of
individuals in relation to the processing and dissemination of personal data and
the protection of confidentiality of individual records and accounts;

(iii)     safety.

(f)      inconsistent with Article 88(1) and Article
94 of this Agreement, provided that the difference in treatment is aimed at
ensuring the effective or equitable imposition or collection of direct taxes in
respect of economic activities, investors or services suppliers of the other
Party[35].

3.           The provisions of this
Chapter and of Annexes XVI-A, XVI-B, XVI-C, XVI-D, XVI-E, XVI-F and XVII to
this Agreement shall not apply to the Parties’ respective social security
systems or to activities in the territory of each Party, which are connected,
even occasionally, with the exercise of official authority.

Article 142

Taxation
measures

The MFN treatment
granted in accordance with the provisions of this Chapter shall not apply to
the tax treatment that Parties are providing or will provide in
future on the basis of agreements between the Parties designed to avoid double
taxation.

Article 143

Security
exceptions

1.           Nothing
in this Agreement shall be construed in such a way as:

(a)     to require any Party to furnish any
information, the disclosure of which it considers contrary to its essential
security interests; or

(b)     to prevent any Party from taking any
action which it considers necessary for the protection of its essential
security interests:

(i)      connected with the production of or
trade in arms, munitions or war material;

(ii)      relating to economic activities
carried out directly or indirectly for the purpose of provisioning a military establishment;

(iii)     relating to fissionable and
fusionable materials or the materials from which they are derived; or

(iv)     taken in time of war or other
emergency in international relations; or

(c)     to prevent any Party from taking any
action in pursuance of obligations it has accepted for the purpose of
maintaining international peace and security.

CHAPTER 7

Current
Payments and Movement of Capital

Article 144

Current
payments

The Parties undertake to impose no
restrictions and shall allow, in freely convertible currency, in accordance
with the provisions of Article VIII of the Articles of the Agreement of the
IMF, any payments and transfers on the current account of balance of payments
between the Parties.

Article 145

Capital
movements

1.           With regard to transactions
on the capital and financial account of balance of payments, from the entry
into force of this Agreement, the Parties shall ensure the free movement of capital
relating to direct investments[36]
made in accordance with the laws of the host country, to investments made in
accordance with the provisions of Chapter 6 (Establishment, Trade in Services
and Electronic Commerce) of Title IV of this Agreement and to the liquidation
or repatriation of such invested capitals and of any profit stemming therefrom.

2.           With regard to other
transactions on the capital and financial account of balance of payments, from
the entry into force of this Agreement and without prejudice to other
provisions of this Agreement the Parties shall ensure:

(a)     the free movement of capital relating
to credits related to commercial transactions or to the provision of services
in which a resident of one of the Parties is participating;

(b)     the free movement of capital relating
to portfolio investments and financial loans and credits by the investors of
the other Party.

3.           Ukraine undertakes to
complete the liberalisation of transactions on the capital and financial
account of balance of payments equivalent to the liberalisation in the EU Party
prior to the granting of internal market treatment in the area of financial
services under Article 4.3 of Annex XVII to this Agreement. A positive
assessment of the Ukrainian legislation on capital movements, its
implementation and continued enforcement conducted in line with the principles
outlined in Article 4.3 of Annex XVII to this Agreement is a necessary
precondition of any decision by the Trade Committee to grant internal market
treatment with respect to financial services.

4.           Without prejudice to other
provisions of this Agreement, the Parties shall not introduce any new
restrictions on the movement of capital and current payments between residents
of the EU Party and Ukraine and shall not make the existing arrangements more
restrictive.

Article 146

Safeguard
measures

Without
prejudice to other provisions of this Agreement, where, in exceptional
circumstances, payments or movements of capital between the Parties cause, or
threaten to cause, serious difficulties for the operation of exchange rate
policy or monetary policy[37]
in one or more Member States of the European Union or Ukraine, the Parties
concerned may take safeguard measures with regard to movements of capital
between the EU Party and Ukraine for a period not exceeding six months if such
measures are strictly necessary. The Party adopting
the safeguard measure shall inform the other Party forthwith of the adoption of
such measure and shall present, as soon as possible, a schedule for its
removal.

Article 147

Facilitation
and further liberalization provisions

1.           The Parties shall consult
each other with a view to facilitating the movement of capital between the
Parties in order to promote the objectives of this Agreement.

2.           During the first four
years following the date of entry into force of this Agreement, the
Parties shall take measures permitting the creation of the necessary conditions
for the further gradual application of EU Party rules on the free movement of
capital.

3.           By the end of the fifth
year following the date of entry into force of this Agreement, the Trade
Committee shall review the measures taken and shall determine the modalities
for further liberalisation.

CHAPTER 8

PUBLIC Procurement

Article 148

Objectives

The Parties recognise the contribution of
transparent, non-discriminatory, competitive and open tendering to sustainable
economic development and set as their objective the effective, reciprocal and
gradual opening of their respective procurement markets.

This Chapter envisages mutual access to
public procurement markets on the basis of the principle of national treatment
at national, regional and local level for public contracts and concessions in
the traditional sector as well as in the utilities sector. It provides for the
progressive approximation of the public procurement legislation in Ukraine with
the EU public procurement acquis, accompanied with an institutional
reform and the creation of an efficient public procurement system based on the
principles governing public procurement in the EU Party and the terms and
definitions set out in Directive 2004/18/EC of the European Parliament and of
the Council of 31 March 2004 on the coordination of procedures for the award of
public works contracts, public supply contracts and public service contracts
(hereinafter referred to as "Directive 2004/18/EC") and Directive
2004/17/EC of the European Parliament and of the Council of 31 March 2004
coordinating the procurement procedures of entities operating in the water,
energy, transport and postal services sectors (hereinafter referred to as
"Directive 2004/17/EC").

Article 149

Scope

1.           This Chapter applies to
works, supplies and services public contracts, as well as works, supplies and
services contracts in the utilities sectors and works and services concessions.

2.           This Chapter applies to
any contracting authority and any contracting entity which meets the
definitions of the EU public procurement acquis (hereinafter both
referred to as the "contracting entities"). It covers also bodies
governed by public law and public undertakings in the field of utilities such
as state-owned enterprises carrying out the relevant activities and private
undertakings operating on the basis of special and exclusive rights in the
field of utilities.

3.           This Chapter applies to
contracts above value thresholds set out in Annex XXI-P:

The calculation of the estimated value of a
public contract shall be based on the total amount payable, net of Value Added
Tax. When applying these thresholds, Ukraine will calculate and convert these
values into its own national currency, using the exchange rate of its National
Bank.

These value thresholds shall be revised
regularly every two years, beginning in the first even year following the entry
into force of the Agreement, based on the average daily value of the Euro,
expressed in Special Drawing Rights, over the 24 months terminating on the last
day of August preceding the revision with effect from January 1. The value of
the thresholds thus revised shall, where necessary, be rounded down to nearest
thousand Euro. The revision of the thresholds shall be adopted by the Trade
Committee according to the procedure defined in Title VII (Institutional
General and Final Provisions) of this Agreement.

Article 150

Institutional
background

1.           The Parties shall establish
or maintain an appropriate institutional framework and mechanisms necessary for
the proper functioning of the public procurement system and the implementation
of the relevant principles.

2.           In the framework of the
institutional reform, Ukraine shall designate in particular:

(a)     a central executive body responsible
for economic policy tasked with guaranteeing a coherent policy in all areas
related to public procurement. Such a body shall facilitate and coordinate the
implementation of this Chapter and guide the process of legislative
approximation

(b)     an impartial and independent body
tasked with the review of decisions taken by contracting authorities or
entities during the award of contracts. In this context, “independent” means
that that body shall be a public authority which is separate from all contracting
entities and economic operators. There shall be a possibility to subject the
decisions taken by this body to judicial review.

3.           The Parties shall ensure
that decisions taken by the authorities responsible for the review of
complaints shall be effectively enforced.

Article 151

Basic
standards regulating the award of contracts

1.           No later than six months
from the entry into force of this Agreement, the Parties shall comply with a
set of basic standards for the award of all contracts as stipulated in paragraphs
2 to 15 of this Article. These basic standards derive directly from the rules
and principles of public procurement, as regulated in the EU public procurement
acquis, including the principles of non-discrimination, equal treatment,
transparency and proportionality.

Publication

2.           The Parties shall ensure
that all intended procurements are published in an appropriate media in a
manner that is sufficient:

(a)     to enable the market to be opened up
to competition; and

(b)     to allow any interested economic
operator to have appropriate access to information regarding the intended
procurement prior to the award of the contract and to express its interest in
obtaining the contract.

3.           The publication shall be
appropriate to the economic interest of the contract to economic operators.

4.           The publication shall
contain at least the essential details of the contract to be awarded, the
criteria for qualitative selection, the award method, the contract award
criteria and any other additional information that the economic operators
reasonably need to make a decision on whether to express their interest in
obtaining the contract.

Award
of contracts

5.           All contracts shall be
awarded through transparent and impartial award procedures that prevent
corruptive practices. This impartiality shall be ensured especially through the
non-discriminatory description of the subject-matter of the contract, equal
access for all economic operators, appropriate time-limits and a transparent
and objective approach.

6.           When describing the
characteristics of the required work, supply or service, the contracting
entities shall use general descriptions of performance and functions and
international, European or national standards.

7.           The description of the
characteristics required of a work, supply or service should not refer to a
specific make or source, or a particular process, or to trade-marks, patents,
types or a specific origin or production unless such a reference is justified
by the subject-matter of the contract and accompanied by the words ‘or
equivalent’. Preference shall be given to the use of general descriptions of
performance or functions.

8.           Contracting entities shall
not impose conditions resulting in direct or indirect discrimination against
the economic operators of the other Party, such as the requirement that
economic operators interested in the contract must be established in the same
country, region or territory as the contracting entity.

Notwithstanding the above, in cases where it is
justified by the specific circumstances of the contract, the successful
applicant may be required to establish certain business infrastructure at the
place of performance.

9.           The time-limits for
expression of interest and for submission of offers shall be sufficiently long
to allow economic operators from the other Party to make a meaningful
assessment of the tender and prepare their offer.

10.         All participants must be
able to know the applicable rules, selection criteria and award criteria in
advance. These rules must apply equally to all participants.

11.         Contracting entities may
invite a limited number of applicants to submit an offer, provided that:

(a)     this is done in a transparent and
non-discriminatory manner; and

(b)     the selection is based only on
objective factors such as the experience of the applicants in the sector
concerned, the size and infrastructure of their businesses or their technical
and professional abilities.

In inviting a limited number of applicants to
submit an offer, account should be taken of the need to ensure adequate
competition.

12.         Contracting entities may
use negotiated procedures only in exceptional defined cases when the use of
such a procedure effectively does not distort competition.

13.         Contracting entities may
use qualification systems only on condition that the list of qualified
operators is compiled by means of a sufficiently advertised, transparent and
open procedure. Contracts falling within the scope of such systems shall be
awarded also on a non-discriminatory basis.

14.         The Parties shall ensure that
contracts are awarded in a transparent manner to the applicant who has
submitted the economically most advantageous offer or the offer with the lowest
price, based on the tender criteria and the procedural rules established and
communicated in advance. The final decisions are to be communicated to all
applicants without undue delay. Upon request of an unsuccessful applicant,
reasons must be provided in sufficient detail to allow a review of the
decision.

Judicial
protection

15.         The Parties shall ensure that
any person having or having had an interest in obtaining a particular contract
and who has been, or risks, being harmed by an alleged infringement is entitled
to effective, impartial judicial protection against any decision of the
contracting entity related to the award of that contract. The decisions taken
in the course and at the end of such review procedure shall be made
public in a manner that is sufficient to inform all interested economic
operators.

Article 152

Planning
of legislative approximation

1.           Prior to the commencement
of legislative approximation, Ukraine shall submit to the Trade Committee a
comprehensive roadmap for the implementation of this Chapter with time
schedules and milestones which should include all reforms in terms of legislative
approximation and institutional capacity building. This roadmap shall comply
with the phases and time Schedules set out in Annex XXI-A to this Agreement.

2.           The roadmap shall cover
all aspects of the reform and the general legal framework for the implementation
of public procurement activities, in particular: legislative approximation for
public contracts, contracts in the utilities sector, works concessions and
review procedures, and strengthening of the administrative capacity at all
levels including review bodies and enforcement mechanisms.

3.           Following a favourable
opinion by the Trade Committee, this roadmap shall be considered as the
reference document for the implementation of this Chapter. The European Union
will make its best efforts in assisting Ukraine in the implementation of the
roadmap.

Article 153

Legislative
approximation

1.           Ukraine shall ensure that
its existing and future legislation on public procurement will be gradually
made compatible with the EU public procurement acquis.

2.           Legislative approximation
shall be carried out in consecutive phases as set out in Annex XXI-A and
Annexes XXI-B to XXI-E, XXI-G, XXI-H, and XXI-J to this Agreement. Annexes
XXI-F and XXI-I to this Agreement identify non-mandatory elements that need not
be transposed, whereas Annexes XXI-K to N to this Agreement identify elements
of the EU acquis that remain outside the scope of legislative
approximation. In this process, due account shall be taken of the corresponding
case law of the European Court of Justice and the implementing measures adopted
by the European Commission as well as, if this should become necessary, of any
modifications of the EU acquis occurring in the meantime. The
implementation of each phase shall be evaluated by the Trade Committee, and, following
a positive assessment by that the Trade Committee, be linked to the reciprocal
granting of market access as set out in Annex XXI-A to this Agreement. The
European Commission shall notify without undue delay Ukraine of any
modifications of the EU acquis. It will provide appropriate advice and
technical assistance for the purpose of implementing such modifications.

3.           The Parties agree that the
Trade Committee shall only proceed to the evaluation of a subsequent phase once
the measures to implement the previous phase have been carried out and approved
according to the modalities set out in paragraph 2 of this Article.

4.           The Parties shall ensure
that those aspects and areas of public procurement which are not covered by
this Article shall comply with the principles of transparency,
non-discrimination and equal treatment as set out in Article 151 of this
Agreement.

Article 154

Market
access

1.           The Parties agree that the
effective and reciprocal opening of their respective markets shall be attained
gradually and simultaneously. During the process of legislative approximation,
the extent of the market access mutually granted shall be linked to the
progress made in this process as stipulated in Annex XXI-A to this Agreement.

2.           The decision to proceed to
a further phase of market opening shall be made on the basis of an assessment
of the quality of the legislation adopted as well as its practical
implementation. Such assessment shall be carried out regularly by the Trade
Committee.

3.           Insofar as a Party has,
according to Annex XXI-A to this Agreement, opened its procurement market to
the other Party, the EU Party shall grant access to contract award procedures
to Ukrainian companies - whether established or not in the EU Party - pursuant
to EU public procurement rules under treatment no less favourable than that
accorded to EU Party companies; Ukraine shall grant access to contract award
procedures for EU Party companies - whether established or not in Ukraine -
pursuant to national procurement rules under treatment no less favourable than
that accorded to Ukrainian companies.

4.           After the implementation
of the last phase in the process of legislative approximation, the Parties will
examine the possibility to mutually grant market access with regard to procurements
even below the value thresholds set out in Article 149(3) of this Agreement.

5.           Finland reserves its
position with regard to the Aland Islands.

Article 155

Information

1.           The Parties shall ensure
that contracting entities and economic operators are well informed about public
procurement procedures, including through the publication of all relevant
legislation and administrative rulings.

2.           The Parties shall ensure
the effective dissemination of information on tendering opportunities.

Article 156

Cooperation

1.           The Parties shall enhance
their cooperation through exchange of experience and information relating to
their best practices and regulatory frameworks.

2.           The EU Party shall
facilitate the implementation of this Chapter, including through technical
assistance where appropriate. In line with the provisions on financial
cooperation in Title VI (Financial Co-operation, with Anti-fraud Provisions) of
this Agreement, specific decisions on financial assistance shall be taken
through the relevant EU funding mechanisms and instruments.

3.           An indicative list of
issues for cooperation is included in Annex XXI-O to this Agreement.

CHAPTER 9

INTELLECTUAL
PROPERTY

Section
1

General
Provisions

Article 157

Objectives

The objectives
of this Chapter are to:

(a)          facilitate the production and
commercialisation of innovative and creative products in the Parties; and

(b)          achieve an
adequate and effective level of protection and enforcement of intellectual
property rights.

Article 158

Nature
and scope of obligations

1.           The Parties shall ensure
the adequate and effective implementation of the international treaties dealing
with intellectual property to which they are parties including the Agreement on
Trade-related Aspects of Intellectual Property Rights, contained in Annex 1C to
the WTO Agreement (hereinafter referred to as the "TRIPS Agreement").
The provisions of this Chapter shall complement and further specify the rights
and obligations between the Parties under the TRIPS Agreement and other
international treaties in the field of intellectual property.

2.           For the purposes of this
Agreement, intellectual property rights embody copyright, including copyright
in computer programs and in databases, and rights related to copyright, rights
related to patents including patents for bio-technological inventions, trade-marks,
trade names in so far as these are protected as exclusive property rights in
the domestic law concerned, designs, layout-designs (topographies) of
integrated circuits, geographical indications, including designations of
origin, indications of source, plant varieties, protection of undisclosed
information and protection against unfair competition as referred to in Article
10 bis of the Paris Convention for the Protection of Industrial Property
(1967) (hereinafter referred to as the "Paris Convention").

Article 159

Transfer of technology

1.           The
Parties agree to exchange views and information on their domestic and
international practices and policies affecting transfer of technology. This
shall in particular include measures to facilitate information flows, business partnerships, and licensing
and subcontracting deals on a voluntary basis. Particular attention shall be
paid to the conditions necessary to create an adequate enabling environment for
technology transfer in the host countries, including issues such as the
relevant legal framework and development of human capital.

2.           The
Parties shall ensure that the
legitimate interests of the intellectual property right holders are protected.

Article 160

Exhaustion

The Parties shall be free to establish their own regime for exhaustion of intellectual
property rights, subject to the provisions of the TRIPS Agreement.

Section
2

Standards
Concerning Intellectual Property Rights

Sub-section
1

Copyright
and Related Rights

Article 161

Protection
granted

The Parties shall
comply with:

a)           Articles 1 to 22 of the
International Convention for the Protection of Performers, Producers of
Phonograms and Broadcasting Organisations (1961) (hereinafter referred to as
the "Rome Convention");

b)           Articles 1 to 18 of the
Berne Convention for the Protection of Literary and Artistic Works (1886, last
amended in 1979) (hereinafter referred to as the "Berne Convention");

c)           Articles 1 to 14 of the World
Intellectual Property Organisation (hereinafter referred to as the ‘WIPO’)
Copyright Treaty (1996) (hereinafter referred to as the "WCT"); and

d)           Articles 1 to 23 of the
WIPO Performances and Phonograms Treaty (1996).

Article 162

Duration
of authors' rights

1.           The rights of an author of
a literary or artistic work within the meaning of Article 2 of the Berne
Convention shall run for the life of the author and for 70 years after his/her
death, irrespective of the date when the work is lawfully made available to the
public.

2.           In the case of a work of
joint authorship, the term referred to in paragraph 1 shall be calculated from
the death of the last surviving author.

3.           In the case of anonymous
or pseudonymous works, the term of protection shall run for 70 years after the
work is lawfully made available to the public. However, when the pseudonym
adopted by the author leaves no doubt as to his/her identity, or if the author
discloses his/her identity during the period referred to in the first sentence,
the term of protection applicable shall be that laid down in paragraph 1.

4.           Where a work is published
in volumes, parts, instalments, issues or episodes and the term of protection
runs from the time when the work was lawfully made available to the public, the
term of protection shall run for each such item separately.

5.           In the case of works for
which the term of protection is not calculated from the death of the author or
authors and which have not been lawfully made available to the public within 70
years from their creation, the protection shall terminate.

Article 163

Duration
of protection of cinematographic or audiovisual works

1.           The principal director of
a cinematographic or audiovisual work shall be considered as its author or one
of its authors. The Parties shall be free to designate other co-authors.

2.           The term of protection of
cinematographic or audiovisual works shall expire not less than 70 years after
the death of the last of a group of specified persons to survive, whether or
not these persons are designated as co-authors. This group should at a minimum
include the principal director, the author of the screenplay, the author of the
dialogue and the composer of music specifically created for use in the
cinematographic or audiovisual work.

Article 164

Duration
of related rights

1.           The rights of performers
shall expire not less than 50 years after the date of the performance. However,
if a fixation of the performance is lawfully published or lawfully communicated
to the public within this period, the rights shall expire not less than 50 years
from the date of the first such publication or the first such communication to
the public, whichever is the earlier.

2.           The rights of producers of
phonograms shall expire not less than 50 years after the fixation is made.
However, if the phonogram has been lawfully published within this period, the
said rights shall expire not less than 50 years from the date of the first
lawful publication. If no lawful publication has taken place within the period
mentioned in the first sentence, and if the phonogram has been lawfully
communicated to the public within this period, the said rights shall expire 50
years from the date of the first lawful communication to the public.

3.           The rights of producers of
the first fixation of a film shall expire not less than 50 years after the
fixation is made. However, if the film is lawfully published or lawfully
communicated to the public during this period, the rights shall expire not less
than 50 years from the date of the first such publication or the first such
communication to the public, whichever is the earlier. The term
"film" shall designate a cinematographic or audiovisual work or
moving images, whether or not accompanied by sound.

4.           The rights of broadcasting
organisations shall expire not less than 50 years after the first transmission
of a broadcast, whether this broadcast is transmitted by wire or over the air,
including by cable or satellite.

Article 165

Protection of previously unpublished works

Any person who,
after the expiry of copyright protection, for the first time lawfully publishes
or lawfully communicates to the public a previously unpublished work, shall
benefit from a protection equivalent to the economic rights of the author. The
term of protection of such rights shall be 25 years from the time when the work
was first lawfully published or lawfully communicated to the public.

Article 166

Critical and scientific publications

The Parties may
also protect critical and scientific publications of works which
have come into the public domain. The maximum term of protection of such rights
shall be 30 years from the time when the publication was first lawfully
published.

Article 167

Protection of photographs

Photographs
which are original in the sense that they are the author's own intellectual
creation shall be protected in accordance with Article162 of this Agreement.
Parties may provide for the protection of other photographs.

Article 168

Cooperation on collective management of rights

The Parties
recognise the necessity of establishing agreements between their respective collecting
societies for the purpose of mutually ensuring easier access to and delivery of
content between the territories of the Parties, as well as ensuring mutual
transfer of royalties for use of the Parties' works or other protected subject
matter. The Parties recognise the need for their respective collecting
societies achieve a high level
of rationalisation and transparency
with respect to the execution of their tasks.

Article 169

Fixation right

1.           For the purpose of this Article, fixation means the embodiment of sounds
and images, or of the representations thereof, from which they can be
perceived, reproduced or communicated through a device.

2.           The Parties shall provide
performers with the exclusive right to authorise or prohibit the fixation of
their performances.

3.           The Parties shall provide
broadcasting organisations with the exclusive right to authorise or prohibit
the fixation of their broadcasts, whether these broadcasts are transmitted by
wire or over the air, including by cable or satellite.

4.           A cable distributor shall
not have the right provided for in paragraph 2 where it merely retransmits by
cable the broadcasts of broadcasting organisations.

Article 170

Broadcasting
and communication to the public

1.           For the purposes of this Article:

(a)     "broadcasting" means the
transmission by wireless means for public reception of sounds or of images and
sounds or of the representations thereof; such transmission by satellite; and
transmission of encrypted signals, where the means for decrypting are provided
to the public by the broadcasting organisation or with its consent;

(b)     "communication to the
public" means the transmission to the public by any medium, otherwise than
by broadcasting, of sounds of a performance or the sounds or the representations
of sounds fixed in a phonogram. For the purposes of paragraph 3,
"communication to the public" includes making the sounds or
representations of sounds fixed in a phonogram audible to the public.

2.           The Parties shall provide performers with the exclusive right
to authorise or prohibit the broadcasting by wireless means and the
communication to the public of their performances, except where the performance
is itself already a broadcast performance or is made from a fixation.

3.           The Parties shall provide
performers and producers of phonograms with the right to a single equitable
remuneration if a phonogram published for commercial purposes, or a
reproduction of such phonogram, is used for broadcasting by wireless means or
for any communication to the public, and ensure that this remuneration is shared among the relevant
performers and phonogram producers. The Parties may, in the absence of
agreement between the performers and phonogram producers, lay down the
conditions as to the sharing of this remuneration among them.

4.           The Parties shall provide
broadcasting organisations with the exclusive right to authorise or prohibit
re-broadcasting of their broadcasts by wireless means, as well as the
communication to the public of their broadcasts if such communication is made
in places accessible to the public against payment of an entrance fee.

Article 171

Distribution right

1.           The Parties shall provide
authors, in respect of the original of their works or of copies thereof, with
the exclusive right to authorise or prohibit any form of distribution to the
public by sale or otherwise.

2.           The Parties shall provide
the exclusive right to make available to the public, by sale or otherwise, the
objects indicated in subparagraphs (a) to (d) of this paragraph, including
copies thereof:

(a)     for performers, in respect of
fixations of their performances;

(b)     for phonogram producers, in respect of
their phonograms;

(c)     for producers of the first fixation
of films, in respect of the original and copies of their films;

(d)     for broadcasting organisations, in
respect of fixations of their broadcasts as set out in Article 169(3) of this
Agreement.

Article 172

Limitations

1.           Parties may provide for
limitations on the rights referred to in Articles 169, 170 and 171 of this
Agreement in respect of:

(a)     private use;

(b)     use of short excerpts in connection
with the reporting of current events;

(c)     ephemeral fixation by a broadcasting
organisation by means of its own facilities and for its own broadcasts;

(d)     use solely for the purposes of
teaching or scientific research.

2.           Notwithstanding paragraph
1, Parties may provide for the same kinds of limitations with regard to the
protection of performers, producers of phonograms, broadcasting organisations
and producers of the first fixations of films, as they provide for in
connection with the protection of copyright in literary and artistic works.
However, compulsory licences may be provided for only to the extent to which
they are compatible with the Rome Convention.

3.           The limitations set out in
paragraphs 1 and 2 of this Article shall be applied only in certain special
cases which do not conflict with a normal exploitation of the subject matter
and do not unreasonably prejudice the legitimate interests of the right holder.

Article 173

Reproduction right

The Parties
shall provide for the exclusive right to authorise or prohibit direct or
indirect, temporary or permanent reproduction by any means and in any form, in
whole or in part:

(a)          for authors, of their works;

(b)          for performers, of fixations of
their performances;

(c)          for phonogram producers, of their
phonograms;

(d)          for the producers of the first
fixations of films, in respect of the original and copies of their films;

(e)          for broadcasting organisations,
of fixations of their broadcasts, whether those broadcasts are transmitted by
wire or over the air, including by cable or satellite.

Article 174

Right of communication to the public of works and right of making
available to the public other subject-matter

1.           The Parties shall provide
authors with the exclusive right to authorise or prohibit any communication to
the public of their works, by wire or wireless means, including the making
available to the public of their works in such a way that members of the public
may access them from a place and at a time individually chosen by them.

2.           The Parties shall provide
for the exclusive right to authorise or prohibit the making available of works to
the public, by wire or wireless means, in such a way that members of the public
may access them from a place and at a time individually chosen by them, namely:

(a)     for performers, of fixations of their
performances;

(b)     for phonogram producers, of their
phonograms;

(c)     for the producers of the first
fixations of films, of the original and copies of their films;

(d)     for broadcasting organisations, of fixations
of their broadcasts, whether these broadcasts are transmitted by wire or over
the air, including by cable or satellite.

3.           Both Parties agree that
the rights referred to in paragraphs 1 and 2 shall not be exhausted by any act
of communication to the public or making them available to the public as set
out in this Article.

Article 175

Exceptions and limitations

1.           The Parties shall provide
that temporary acts of reproduction referred to in Article 173 of this
Agreement, which are transient or incidental, which are an integral and
essential part of a technological process and the sole purpose of which is to
enable:

(a)     transmission in a network between
third parties by an intermediary; or

(b)     lawful use

of a work or other subject-matter to be made,
and which have no independent economic significance, shall be exempted from the
reproduction right provided for in Article 173.

2.           Where the Parties provide
for an exception or limitation to the right of reproduction provided for in
Article 173, they may provide similarly for an exception or limitation to the
right of distribution provided for in Article 171(1) of this Agreement to the
extent justified by the purpose of the authorised act of reproduction.

3.           The Parties may provide
for exceptions and limitations to the rights set out in Articles 173 and 174 of
this Agreement only in certain special cases which do not conflict with normal
exploitation of the work or other subject-matter and do not unreasonably
prejudice the legitimate interests of the right holder.

Article 176

Protection
of technological measures

1.           The Parties shall provide
adequate legal protection against the circumvention of any effective
technological measures which the person concerned carries out in the knowledge,
or with reasonable grounds for knowing, that he/she is pursuing that objective.

2.           The Parties shall provide
adequate legal protection against the manufacture, import, distribution, sale,
rental, advertisement for sale or rental, or possession for commercial purposes
of devices, products or components or the provision of services which:

(a)     are promoted, advertised or marketed
for the purpose of circumvention of; or

(b)     have only a limited commercially
significant purpose or use other than to circumvent; or

(c)     are primarily designed, produced,
adapted or performed for the purpose of enabling or facilitating the
circumvention of, any effective technological measures.

3.           For the purposes of this Section,
the expression "technological measures" means any technology, device
or component that, in the normal course of its operation, is designed to
prevent or restrict acts, in respect of works or other subject-matter, which
are not authorised by the right holder of any copyright or any right related to
copyright as provided for by each Party's legislation. Technological measures
shall be deemed "effective" where the use of a protected work or
other subject matter is controlled by the right holders through application of
an access control or protection process, such as encryption, scrambling or
other transformation of the work or other subject-matter or a copy control
mechanism, which achieves the protection objective.

4.           Where Parties provide for
limitations to the rights set out in Articles 172 and 175 of this Agreement,
they may also ensure that right holders make available to a beneficiary of an
exception or limitation the means of benefiting from that exception or
limitation to the extent necessary to benefit from that exception or limitation
and where that beneficiary has legal access to the protected work or subject
matter concerned.

5.           The provisions of Article
175(1) and Article 175(2) of this Agreement shall not apply to works or other
subject-matter made available to the public on agreed contractual terms in such
a way that members of the public may access them from a place and at a time
individually chosen by them.

Article 177

Protection
of rights management information

1.           The Parties shall provide
for adequate legal protection against any person knowingly performing without
authority any of the following acts:

(a)     the removal or alteration of any
electronic rights-management information;

(b)     the distribution, importation for
distribution, broadcasting, communication or making available to the public of
works or other subject-matter protected under this Agreement from which
electronic rights-management information has been removed or altered without
authority,

if such person knows, or has reasonable grounds
to know, that by so doing he is inducing, enabling, facilitating or concealing
an infringement of any copyright or any rights related to copyright as provided
by the law of the relevant Party.

2.           For the purposes of this
Agreement, the expression "rights-management information" means any
information provided by right holders which identifies the work or other
subject-matter referred to in Sub-section 1, the author or any other right
holder, or information about the terms and conditions of use of the work or
other subject-matter, and any numbers or codes that represent such information.

The first paragraph shall apply when any of
these items of information is associated with a copy of, or appears in
connection with the communication to the public of, a work or other
subject-matter referred to in Sub-section 1.

Article 178

Right holders and subject matter of rental and lending right

1.           The Parties should provide the exclusive right
to authorise or prohibit rental and lending for the following:

(a)     the author in respect of the original
and copies of his/her work;

(b)     the performer in respect of fixations
of his/her performance;

(c)     the phonogram producer in respect of his/her
phonograms;

(d)     the producer of the first fixation of
a film in respect of the original and copies of his film.

2.           These provisions shall not cover rental and
lending rights in relation to buildings and to works of applied art.

3.           The Parties may derogate
from the exclusive right provided for in paragraph 1 in respect of public
lending, provided that at least authors obtain remuneration for such lending.
The Parties shall be free to
determine this remuneration, taking account of their cultural promotion
objectives.

4.           Where the Parties do not
apply the exclusive lending right provided for in this Article as regards phonograms,
films and computer programs, they shall introduce, at least for authors,
remuneration.

5.           The Parties may exempt
certain categories of establishments from the payment of the remuneration
referred to in paragraphs 3 and 4.

Article 179

Unwaivable right to equitable remuneration

1.           Where an author or
performer has transferred or assigned his/her rental right concerning a
phonogram or an original or copy of a film to a phonogram or film producer,
that author or performer shall retain the right to obtain equitable
remuneration for the rental.

2.           The right to obtain
equitable remuneration for rental cannot be waived by authors or performers.

3.           The administration of the
right to obtain equitable remuneration may be entrusted to collecting societies
representing authors or performers.

4.           The Parties may regulate
whether and to what extent administration by collecting societies of the right
to obtain equitable remuneration may be imposed, as well as the question from
whom this remuneration may be claimed or collected.

Article 180

Protection of computer programs

1.           The Parties shall protect
computer programs, by copyright, as literary works within the meaning of the
Berne Convention. For the purposes of this provision, the term "computer
programs" shall include their preparatory design material.

2.           Protection in accordance
with this Agreement shall apply to the expression in any form of a computer
program. Ideas and principles which underlie any element of a computer program,
including those which underlie its interfaces, are not protected by copyright
under this Agreement.

3.           A
computer program shall be protected if it is original in the sense that it is
the author's own intellectual creation. No other criteria shall be applied to
determine its eligibility for protection.

Article 181

Authorship of computer programs

1.           The author of a computer
program shall be the natural person or group of natural persons that has
created the program or, where the legislation of the Parties permits, the legal
person designated as the right holder by that legislation.

2.           In respect of a computer
program created by a group of natural persons jointly, the exclusive rights
shall be owned jointly.

3.           Where collective works are
recognised by the legislation of the Parties, the person considered by the
legislation of the Parties to have created the work shall be deemed to be its
author.

4.           Where a computer program
is created by an employee in the execution of his/her duties or following the
instructions given by his/her employer, the employer exclusively shall be
entitled to exercise all economic rights in the program so created, unless
otherwise provided by contract.

Article 182

Restricted acts relating to computer programs

Subject to the
provisions of Articles 183 and 184 of this Agreement, the exclusive rights of
the right holder within the meaning of Article 181, shall include the right to carry
out or to authorise:

(a)          permanent or temporary
reproduction of a computer program by any means and in any form, in part or in
whole. Insofar as acts of loading, displaying, running, transmission or storage
of the computer program necessitate such reproduction, those acts shall be
subject to authorisation by the right holder;

(b)          the translation, adaptation,
arrangement and any other alteration of a computer program and the reproduction
of the results thereof, without prejudice to the rights of the person who
alters the program;

(c)          any form of distribution to the
public, including the rental, of the original computer program or of copies thereof.

Article 183

Exceptions to the restricted acts relating to computer programs

1.           In the absence of specific
contractual provisions, the acts referred to in Article 182(a) and (b) of this
Agreement shall not require authorisation by the right holder where they are
necessary for the use of the computer program by the lawful acquirer in
accordance with its intended purpose, including for error correction.

2.           The making of a back-up
copy by a person having a right to use the computer program may not be prevented
by contract insofar as it is necessary for that use.

3.           The person having a right
to use a copy of a computer program shall be entitled, without the
authorisation of the right holder, to observe, study or test the functioning of
the program in order to determine the ideas and principles which underlie any
element of the program if he does so while performing any of the acts of
loading, displaying, running, transmitting or storing the program which he is
entitled to do.

Article 184

Decompilation

1.           The authorisation of the
right holder shall not be required where reproduction of the code and
translation of its form within the meaning of Article 182 (a) and (b) are
indispensable to obtain the information necessary to achieve the
interoperability of an independently created computer program with other
programs, provided that the following conditions are met:

(a)     these acts are performed by the
licensee or by another person having a right to use a copy of a program, or on
their behalf by a person authorised to do so;

(b)     the information necessary to achieve
interoperability has not previously been readily available to the persons
referred to in subparagraph (a) of this paragraph; and

(c)     these acts are confined to the parts
of the original program which are necessary to achieve interoperability.

2.           The provisions of
paragraph 1 shall not permit the information obtained through its application:

(a)     to be used for goals other than to
achieve the interoperability of the independently created computer program;

(b)     to be given to others, except when
necessary for the interoperability of the independently created computer
program; or

(c)     to be used for the development,
production or marketing of a computer program substantially similar in its
expression, or for any other act which infringes copyright.

3.           In
accordance with the provisions of the Berne Convention, this Article may not be
interpreted in such a way as to allow its application to be used in a manner
which unreasonably prejudices
the right holder's legitimate interests or conflicts with a normal exploitation
of the computer program.

Article 185

Protection of databases

1.           For the purposes of this
Agreement, "database" shall mean a collection of independent works,
data or other materials arranged in a systematic or methodical way and
individually accessible by electronic or other means.

2.           Protection under this Agreement shall not apply to computer programs used in
the making or operation of databases accessible by electronic means.

Article 186

Object of protection

1.           In accordance with
Sub-section 1, databases which, by reason of the selection or arrangement of
their contents, constitute the author's own intellectual creation shall be
protected as such by copyright. No other criteria shall be applied to determine
their eligibility for that protection.

2.           The copyright protection
of databases provided for in Sub-section 1 shall not extend to their contents
and shall be without prejudice to any rights subsisting in those contents
themselves.

Article 187

Database authorship

1.           The author of a database
shall be the natural person or group of natural persons who created the base or,
where the legislation of the Parties so permits, the legal person designated as
the right holder by legislation.

2.           Where collective works are
recognised by the legislation of the Parties, the economic rights shall be
owned by the person holding the copyright.

3.           In respect of a database
created by a group of natural persons jointly, the exclusive rights shall be
owned jointly.

Article 188

Restricted acts relating to databases

In respect of
the expression of a database which is protectable by copyright, the author of the
database shall have the exclusive right to carry out or to authorise:

(a)          temporary or permanent
reproduction by any means and in any form, in whole or in part;

(b)          translation, adaptation,
arrangement and any other alteration;

(c)          any form of distribution to the
public of the database or copies thereof;

(d)          any communication, display or
performance to the public;

(e)          any reproduction, distribution,
communication, display or performance to the public of the results of the acts
referred to in subparagraph (b).

Article 189

Exceptions to restricted acts relating to databases

1.           Performance by the lawful
user of a database or a copy thereof of any of the acts listed in Article 188
of this Agreement which is necessary for purposes of access to the contents of
the database and normal use of the contents by the lawful user shall not
require the authorisation of the author of the database. Where the lawful user
is authorised to use only part of the database, this provision shall apply only
to that part.

2.           The Parties shall have the
option of providing for limitations on the rights set out in Article 188 in the
following cases:

(a)     in the case of reproduction for
private purposes of a non-electronic database;

(b)     where there is use for the sole
purpose of illustration for teaching or scientific research, as long as the
source is indicated and to the extent justified by the non-commercial purpose
to be achieved;

(c)     where there is use for purposes of
public security or for the purposes of an administrative or judicial procedure;

(d)     where other exceptions to copyright
are traditionally authorised by each Party, without prejudice to subparagraphs
(a), (b) and (c).

3.           In accordance with the
Berne Convention, this Article may not be interpreted in such a way as to allow
its application in a manner which unreasonably prejudices the right holder's
legitimate interests or conflicts with normal exploitation of the database.

Article 190

Resale right

1.           The Parties shall provide,
for the benefit of the author of an original work of art, a resale right, to be
defined as an inalienable right, which cannot be waived, even in advance, to
receive a royalty based on the sale price obtained for any resale of the work,
subsequent to the first transfer of the work by the author.

2.           The right referred to in
paragraph 1 shall apply to all acts of resale involving as sellers, buyers or
intermediaries art market professionals, such as salesrooms, art galleries and,
in general, any dealers in works of art.

3.           The Parties may provide in
accordance with their legislation that the right referred to in
paragraph 1 shall not apply to acts of resale where the seller has acquired the
work directly from the author less than three years before that resale and
where the resale price does not exceed a certain minimum amount.

4.           The royalty shall be
payable by the seller. The Parties may provide that one of the natural or legal
persons referred to in paragraph 2 other than the seller shall alone be liable
or shall share liability with the seller for payment of the royalty.

Article 191

Broadcasting
of programmes by satellite

Each Party shall provide the author with an
exclusive right to authorise the communication of copyright works to the public
by satellite.

Article 192

Cable
retransmission

Each Party shall ensure that when
programmes from the other Party are retransmitted by cable in their territory
the applicable copyright and related rights are observed and that such
retransmission takes place on the basis of individual or collective contractual
agreements between copyright owners, holders of related rights and cable
operators.

Sub-section 2

Trade-marks

Article 193

Registration procedure

1.           The EU Party and Ukraine shall provide for a system for the registration of trade-marks
in which any refusal by the relevant trade-mark administration to register a trade-mark is duly reasoned. The
reasons for the refusal shall be communicated in writing to the applicant, who
will have the opportunity to contest such refusal and to appeal a final refusal
before judicial authorities. The EU Party and Ukraine shall also introduce the possibility to oppose trade-mark
applications. Such opposition proceedings shall be adversarial. The EU Party and Ukraine shall
provide a publicly available electronic database of trade-mark applications and
trade-mark registrations.

2.           The Parties shall provide for grounds for refusal or invalidity of a trade-mark registration.
The following shall not be registered or if registered shall be liable to be
declared invalid:

(a)     signs which cannot constitute a trade-mark;

(b)     trade-marks which are devoid of any
distinctive character;

(c)     trade-marks consisting exclusively of
signs or indications which may serve, in trade, to designate the kind, quality,
quantity, intended purpose, value, geographical origin, or the time of
production of the goods or of rendering of the service, or other
characteristics of the goods or service;

(d)     trade-marks consisting exclusively of
signs or indications which have become customary in the current language or in
the bona fide and established practices of the trade;

(e)     signs which consist exclusively of:

(i)      the shape that results from the
nature of the goods themselves; or

(ii)      the shape of the goods which is
necessary to obtain a technical result; or

(iii)     the shape which gives substantial
value to the goods;

(f)      trade-marks which are contrary to
public policy or to accepted principles of morality;

(g)     trade-marks which are of such a nature
as to deceive the public, for instance as to the nature, quality or
geographical origin of the goods or service;

(h)     trade-marks which have not been
authorised by the competent authorities and are to be refused or invalidated
pursuant to Article 6 ter of the Paris Convention.

3.           The Parties shall provide
for grounds for refusal or invalidity concerning conflicts with earlier rights.
A trade-mark shall not be registered or, if registered, shall be liable to be
declared invalid:

(a)     if it is identical to an earlier trade-mark,
and the goods or services for which the trade-mark is applied for or is
registered are identical to the goods or services for which the earlier trade-mark
is protected;

(b)     if because of its identity with, or
similarity to, the earlier trade-mark and the identity or similarity of the
goods or services covered by the trade-marks, there exists a likelihood of
confusion on the part of the public, which includes the likelihood of association
with the earlier trade-mark.

4.           The Parties may also
provide for other grounds for refusal or invalidity concerning conflicts with
earlier rights.

Article 194

Well-known trade-marks

The Parties shall cooperate with the aim of
making protection of well-known trade-marks, as referred to in Article 6 bis
of the Paris Convention and in Article 16.2 and 16.3 of the TRIPS Agreement,
effective.

Article 195

Rights
conferred by a trade-mark

The registered trade-mark shall confer on
the proprietor exclusive rights therein. The proprietor shall be entitled to
prevent all third parties not having his/her consent from using in the course
of trade:

(a)          any sign which is identical to the
trade-mark in relation to goods or services which are identical with those for
which the trade-mark is registered;

(b)          any sign where, because of its
identity to, or similarity to, the trade-mark and the identity or similarity of
the goods or services covered by the trade-mark and the sign, there exists a
likelihood of confusion on the part of the public, which includes the
likelihood of association between the sign and the trade-mark.

Article 196

Exceptions to the rights conferred by a trade-mark

1.           The Parties shall provide
for the fair use of descriptive terms, including geographical indications, as a
limited exception to the rights conferred by a trade-mark, provided that such
limited exceptions take account of the legitimate interests of the owner of the trade-mark
and of third parties. Under the same conditions, the Parties may provide for
other limited exceptions.

2.           A trade-mark shall not
entitle the proprietor to prohibit a third party from using, in the course of
trade:

(a)     his/her own name or address;

(b)     indications concerning the kind,
quality, quantity, intended purpose, value, geographical origin, the time of
production of goods or of rendering of a service, or other characteristics of
goods or services;

(c)     the trade-mark where it is necessary
to indicate the intended purpose of a product or service, in particular as accessories
or spare parts, provided he/she uses it in accordance with honest practices in
industrial or commercial matters.

3.           A trade-mark shall not
entitle the proprietor to prohibit a third party from using, in the course of
trade, an earlier right which only applies in a particular locality if that
right is recognised by the laws of the Parties in question and within the
limits of the territory in which it is recognised.

Article 197

Use
of trade-marks

1.           If, within a period of
five years following the date of completion of the registration procedure, the
proprietor has not put a trade-mark to genuine use in connection with the goods
or services in respect of which it is registered in the relevant territory, or
if such use has been suspended during an uninterrupted period of five years,
the trade-mark shall be subject to the sanctions provided for in this Sub-section,
unless there are proper reasons for non-use.

2.           The following shall also
constitute use within the meaning of paragraph 1:

(a)     use of the trade-mark in a form
differing in elements which do not alter the distinctive character of the mark
in the form in which it was registered;

(b)     affixing of the trade-mark to goods or
to the packaging thereof solely for export purposes.

3.           Use of a trade-mark with
the consent of the proprietor or by any person who has authority to use a
collective mark or a guarantee or certification mark shall be deemed to
constitute use by the proprietor within the meaning of paragraph 1.

Article 198

Grounds
for revocation

1.           The Parties shall provide
that a trade-mark shall be liable to revocation if, within a continuous period
of five years, it has not been put to genuine use in the relevant territory in
connection with the goods or services in respect of which it is registered, and
there are no proper reasons for non-use; however, no person may claim that the
proprietor's rights in a trade-mark should be revoked where, during the
interval between expiry of the five-year period and filing of the application
for revocation, genuine use of the trade-mark has been started or resumed; the
commencement or resumption of use within a period of three months preceding the
filing of the application for revocation which began at the earliest on expiry
of the continuous period of five years of non-use, shall, however, be
disregarded where preparations for the commencement or resumption occur only
after the proprietor becomes aware that the application for revocation may be
filed.

2.           A trade-mark shall also be
liable to revocation if, after the date on which it was registered:

(a)     in consequence of acts or inactivity
of the proprietor, it has become the common name in the trade for a product or
service in respect of which it is registered;

(b)     in consequence of the use made of it
by the proprietor of the trade-mark or with his/her consent in respect of the
goods or services for which it is registered, it is liable to mislead the
public, particularly as to the nature, quality or geographical origin of those
goods or services.

Article 199

Partial refusal, revocation or invalidity

Where grounds for refusal of registration
or for revocation or invalidity of a trade-mark exist in respect of only some
of the goods or services for which that trade-mark has been applied for or
registered, refusal of registration or revocation or invalidity shall cover
those goods or services only.

Article 200

Term of protection

The duration of
protection available in the EU
Party and Ukraine following the date of filing of an application shall amount
to at least 10 years. The right holder may have the term of protection renewed
for further periods of 10 years.

Sub-section 3

Geographical Indications

Article 201

Scope
of the Sub-section

1.           This Sub-section applies
to the recognition and protection of geographical indications originating in
the territories of the Parties.

2.           Geographical
indications of a Party to be
protected by the other Party shall only be subject to this Agreement if covered
by the scope of the legislation referred to in Article 202 of this Agreement.

Article 202

Established
geographical indications

1.           Having examined the Ukrainian legislation listed in
Annex XXII-A Part A to this Agreement, the EU Party concludes that these laws
meet the elements laid down in Annex XXII-A Part B to this Agreement.

2.           Having examined the EU
Party's legislation listed in Annex XXII-A Part A to this Agreement, Ukraine
concludes that these laws meet
the elements laid down in Annex XXII-A Part B to this Agreement.

3.           Ukraine, after having
completed an objection procedure in accordance with the criteria set out in
Annex XXII-B to this Agreement and after having examined the geographical
indications for the agricultural products and foodstuffs of the EU Party listed
in Annex XXII-C to this Agreement and the geographical indications for wines,
aromatised wines and spirit drinks of the EU Party listed in Annex XXII-D to
this Agreement, which have been registered by the EU Party under the
legislation referred to in paragraph 2, shall protect those geographical
indications according to the level of protection laid down in this Sub-section.

4.           The EU Party, after having
completed an objection procedure in accordance with the criteria set out in
Annex XXII-B to this Agreement and after having examined the geographical
indications for the wines, aromatised wines and spirit drinks of Ukraine listed
in Annex XXII-D to this Agreement, which have been registered by Ukraine under
the legislation referred to in paragraph 1, shall protect those geographical
indications according to the level of protection laid down in this Sub-section.

Article 203

Addition
of new geographical indications

1            The Parties agree on the
possibility of adding new geographical indications to be protected in Annexes
XXII-C and XXII-D to this Agreement in accordance with Article 211 (3) of this
Agreement after having
completed the objection procedure and having examined the geographical
indications as referred to in Article 202(3) and (4) of this Agreement to the
satisfaction of both Parties.

2.           A Party shall not be required to protect as a geographical
indication a name that conflicts with the name of a plant variety or an animal
breed and as a result is likely to mislead the consumer as to the true origin
of the product.

Article 204

Scope
of protection of geographical indications

1.           The
geographical indications listed in Annexes XXII-C and XXII-D to this Agreement,
including those added pursuant to Article 203 of this Agreement, shall be
protected against:

(a)     any direct or indirect commercial use
of a protected name for comparable products not compliant with the product
specification of the protected name, or in so far as such use exploits the
reputation of a geographical indication;

(b)     any misuse, imitation or evocation,
even if the true origin of the product is indicated or if the protected name is
translated, transcripted, transliterated or accompanied by an expression such
as "style", "type", "method", "as produced
in", "imitation", "flavour", "like", or
similar;

(c)     any other false or misleading
indication as to the provenance, origin, nature or essential qualities of the
product, on the inner or outer packaging, in advertising material or documents
relating to the product concerned, and on the packing of the product in a
container liable to convey a false impression as to its origin;

(d)     any other practice liable to mislead
the consumer as to the true origin of the product.

2.           Protected geographical
indications shall not become generic in the territories of the Parties.

3.           If geographical
indications are wholly or partially homonymous, protection shall be granted to each indication provided that it has
been used in good faith and with due regard for local and traditional usage and
the actual risk of confusion. Without prejudice to Article 23 of the TRIPS
Agreement, the Parties shall mutually decide the practical conditions of use
under which the homonymous geographical indications will be differentiated from
each other, taking into account the need to ensure equitable treatment of the
producers concerned and that consumers are not misled. A homonymous name which
misleads the consumer into believing that products come from another territory
shall not be registered even if the name is accurate as far as the actual
territory, region or place of origin of the product in question is concerned.

4.           Where a Party, in the
context of negotiations with a third country, proposes to protect a
geographical indication of the third country, and the name is homonymous with a
geographical indication of the other Party the latter shall be informed and be
given the opportunity to comment before the name is protected.

5.           Nothing in this Agreement
shall oblige a Party to protect a geographical indication of the other Party
which is not or ceases to be protected in its country of origin. The Parties
shall notify each other if a geographical indication ceases to be protected in
its country of origin. Such notification shall take place in accordance with
Article 211(3) of this Agreement.

6.           Nothing in this Agreement
shall prejudice the right of any person to use, in the course of trade, that
person's name or the name of that person's predecessor in business, except
where such name is used in such a manner as to mislead the public.

Article 205

Right of use of geographical indications

1.           The commercial use of a
name protected under this Agreement for agricultural products, foodstuffs,
wines, aromatised wines or spirit drinks conforming to the corresponding
specification is open to any entity.

2.           Once a geographical
indication is protected under this Agreement, the use of such protected name
shall not be subject to any registration of users or further charges.

Article 206

Relationship
with trade-marks

1.           The Parties shall refuse
to register or shall invalidate a trade-mark that corresponds to any of the
situations referred to in Article 204(1) of this Agreement in relation to a
protected geographical indication for like products, provided an application to
register the trade-mark is submitted after the date of application for registration
of the geographical indication in the territory concerned.

2.           For geographical
indications referred to in Article 202 of this Agreement, the date of
application for registration shall be the date of entry into force of this
Agreement.

3.           For geographical
indications referred to in Article 203 of this Agreement, the date of
application for registration shall be the date of the transmission of a request
to the other Party to protect a geographical indication.

4.           The Parties shall have no
obligation to protect a geographical indication pursuant to Article 203 of this
Agreement where, in the light of a reputed or well-known trade-mark, protection
is liable to mislead consumers as to the true identity of the product.

5.           Without prejudice to
paragraph 4 of this Article, the Parties shall protect geographical indications
also where a prior trade-mark exists. Prior trade-mark shall mean a trade-mark,
the use of which corresponds to one of the situations referred to in Article
204(1) of this Agreement, which has been applied for, registered or established
by use, if that possibility is provided for by the legislation concerned, in
the territory of one of the Parties before the date on which the application
for protection of the geographical indication is submitted by the other Party
under this Agreement. Such trade-mark
may continue to be used and renewed notwithstanding the protection of the
geographical indication, provided that no grounds for the trade-mark’s
invalidity or revocation exist in the legislation on trade-marks of the
Parties.

Article 207

Enforcement of protection

The Parties shall enforce the protection
provided for in Articles 204 to 206 of this Agreement by appropriate action by their authorities including at the
customs border. They shall also enforce such protection
at the request of an interested party.

Article 208

Temporary measures

1            Products which were
produced and labelled in conformity with national law before this Agreement
entered into force but which do not comply with the requirements of this
Agreement, may continue to be sold until stocks run out.

2.           Products which were
produced and labelled, in conformity with domestic law, with the geographical
indications listed in paragraphs 3 and 4 below after this Agreement entered
into force and before the termination of the periods referred to in paragraphs
3 and 4 below, but which do not comply with the requirements of this Agreement,
may continue to be sold in the territory of the Party where the product originated
until stocks run out.

3.           For a transitional period
of 10 years from the entry into force of this Agreement, the protection
pursuant to this Agreement of the following geographical indications of the EU
Party shall not preclude these geographical indications from being used in order
to designate and present certain comparable products originating in Ukraine:

(a)     Champagne,

(b)     Cognac,

(c)     Madeira,

(d)     Porto,

(e)     Jerez /Xérès/ Sherry,

(f)      Calvados,

(g)     Grappa,

(h)     Anis Português,

(i)      Armagnac,

(j)      Marsala,

(k)     Malaga,

(l)      Tokaj.

4.           For a transitional period
of seven years from the entry into force of this Agreement, the protection,
pursuant to this Agreement, of the following geographical indications of the EU
Party shall not preclude these geographical indications from being used in
order to designate and present certain comparable products originating in
Ukraine:

(a)     Parmigiano Reggiano,

(b)     Roquefort,

(c)     Feta

Article 209

General
rules

1.           The importation,
exportation and commercialisation of any product referred to in Articles 202
and 203 of this Agreement shall be conducted in compliance with the laws and
regulations applying in the territory of the Party in which the products are
placed on the market.

2.           Any matter arising from
product specifications of registered geographical indications shall be dealt
with in the GI Sub-Committee established pursuant to Article 211 of this
Agreement.

3.           The registration of
geographical indications protected under this Agreement may only be cancelled
by the Party in which the product originates.

4.           A product specification
referred to in this Sub-section shall be that which is approved, including any
amendments also approved, by the authorities of the Party in whose territory
the product originates.

Article 210

Cooperation
and transparency

1.           The
Parties shall, either directly or through the GI Sub-Committee established
pursuant to Article 211 of this Agreement, maintain contact on all matters
related to the implementation and functioning of this Agreement. In particular,
a Party may request from the other Party information relating to product
specifications and their modification, and contact points for control
provisions.

2.           Each
Party may make publicly available the product specifications or a summary
thereof and contact points for control provisions corresponding to geographical
indications of the other Party protected pursuant to this Agreement.

Article 211

Sub-Committee
on Geographical Indications

1.           The Sub-Committee on
Geographical Indications (GI Sub-Committee) is hereby established. It shall
report on its activities to the Association Committee in its configuration
under Article 465(4) of this Agreement. The GI Sub-Committee shall consist of
representatives of the EU and Ukraine with the purpose of monitoring the development
of this Agreement and of intensifying their co-operation and dialogue on
geographical indications.

2.           The GI Sub-Committee shall
adopt its decisions by consensus. It shall determine its own rules of
procedure. It shall meet at the request of either of the Parties, alternatively
in the European Union and in Ukraine, at a time and a place and in a manner
(which may include by videoconference) mutually determined by the Parties, but
no later than 90 days after the request.

3.           The GI Sub-Committee shall
also see to the proper functioning of this Sub-section and may consider any
matter related to its implementation and operation. In particular, it shall be
responsible for:

(a)     amending Annex XXII-A Part A to this
Agreement, as regards the references to the law applicable in the Parties;

(b)     amending Annex XXII-A Part B to this
Agreement, as regards the elements for registration and control of geographical
indications;

(c)     amending Annex XXII-B to this
Agreement, as regards the criteria to be included in the objection procedure;

(d)     modifying Annexes XXII-C and XXII-D to
this Agreement as regards geographical indications;

(e)     exchanging information on legislative
and policy developments on geographical indications and any other matter of
mutual interest in the area of geographical indications;

(f)      exchanging information on
geographical indications for the purpose of considering their protection in
accordance with this Agreement.

Sub-section 4

Designs

Article 212

Definition

For the purposes
of this Agreement:

(a)          "design" means the
appearance of the whole or a part of a product resulting from the features of,
in particular, the lines, contours, colours, shape, texture and/or materials of
the product itself and/or its ornamentation;

(b)          "product" means any
industrial or handicraft item, including inter alia parts intended to be
assembled into a complex product, packaging, get-up, graphic symbols and typographic
typefaces, but excluding computer programs;

(c)          "complex product" means
a product which is composed of multiple components that can be replaced,
permitting disassembly and reassembly of the product.

Article 213

Requirements for protection

1.           The EU Party and Ukraine
shall provide for the protection of independently created designs that are new
and have individual character.

2.           A design applied to or
incorporated in a product which constitutes a component part of a complex
product shall only be considered to be new and to have individual character:

(a)     if the component part, once it has
been incorporated into the complex product, remains visible during normal use
of the latter; and

(b)     to the extent that those visible
features of the component part fulfil in themselves the requirements as to
novelty and individual character.

3.           A
design shall be considered to be new if no identical design has been made
available to the public:

(a)     in the case of an unregistered design, before the
date on which the design for which protection is claimed has first been made
available to the public;

(b)     in the case of a registered design, before the date of
filing of the application for registration of the design for which protection
is claimed, or, if priority is claimed, the date of priority.

Designs shall be deemed to be identical if
their features differ only in immaterial details.

4.           A
design shall be considered to have individual character if the overall
impression it produces on an informed user differs from the overall impression
produced on such a user by any other design which has been made available to
the public:

(a)     in the case of an
unregistered design, before the date on which the design for which protection
is claimed has first been made available to the public;

(b)     in the case of a
registered design, before the date of filing of the application for
registration of the design for which protection is claimed, or, if priority is
claimed, the date of priority.

In assessing individual character, the degree
of freedom of the designer in developing the design shall be taken into
consideration.

5.           This
protection shall be provided by registration, and shall confer exclusive rights
upon their holders in accordance with the provisions of this Article.
Unregistered designs made available to the public shall confer the same
exclusive rights, but only if the contested use results from copying the protected
design.

6.           A design shall be deemed
to have been made available to the public if it has been published following
registration or otherwise, or exhibited, used in trade or otherwise disclosed,
except where these events could not reasonably have become known in the normal course of
business to the circles specialised in the sector concerned, operating within the territory in which protection is
claimed, before the date of filing of the application for registration
or, if priority is claimed, the date of priority. In
the case of unregistered design protection, a design shall be deemed to have
been made available to the public if it has been published, exhibited, used in
trade or otherwise disclosed in such way that, in the normal course of
business, these events could reasonably have become known to the circles
specialised in the sector concerned, operating within the territory in which
protection is claimed.

A design shall not, however, be deemed to have
been made available to the public for the sole reason that it has been
disclosed to a third person under explicit or implicit conditions of
confidentiality.

7.           Disclosure shall not be
taken into consideration for the purpose of applying paragraphs 3 and 4 of this
Article if a design for which protection is
claimed under a registered design right has been made available to the public:

(a)     by the designer,
his/her successor in title, or a third person as a result of information
provided or action taken by the designer, or his/her successor in title; and

(b)     during the twelve-month period
preceding the date of filing of the application or, if priority is claimed, the
date of priority.

8.           Paragraph 7 of this
Article shall also apply if a design has been made available to the public as a
consequence of an abuse in relation to the designer or his/her successor in
title.

Article 214

Term of protection

1.           The
duration of protection available in the EU Party and Ukraine following registration shall amount to
at least five years. The right holder may have the term of protection renewed
for one or more periods of five years each, up to a total term of 25 years from the date of filing.

2.           The
duration of protection available in the EU Party and Ukraine for unregistered
designs shall amount to at least three years as from the date on which the design was made available to
the public in the territory of one of the Parties.

Article 215

Invalidity or refusal of registration

1.           The EU Party and Ukraine may only provide that a design is
refused for registration or declared invalid after registration on substantive
grounds in the following cases:

(a)     if the design does not correspond to the
definition under Article 212(a) of this Agreement;

(b)     if it does not fulfil the requirements
of Article 213 and Article 217 (paragraphs 3, 4 and 5) of this Agreement;

(c)     if, by virtue of a court decision, the
right holder is not entitled to the design;

(d)     if the design is in conflict with a
prior design which has been made available to the public after the date of
filing of the application or, if priority is claimed, the date of priority of
the design, and which is protected from a date prior to the said date by a
registered design or an application for a design;

(e)     if a distinctive sign is used in a
subsequent design, and the law of the Party concerned governing that sign
confers on the right holder of the sign the right to prohibit such use;

(f)      if the design constitutes an
unauthorised use of a work protected under the copyright law of the Party
concerned;

(g)     if the design constitutes an improper
use of any of the items listed in Article 6 ter of the Paris Convention or of
badges, emblems and escutcheons other than those
covered by the said Article 6 ter and which are of particular public
interest in the territory of a Party.

This paragraph is without prejudice to the
right of the Parties to set formal requirements for design applications.

2.           A Party may provide, as an
alternative to invalidity, that
a design, which may be invalidated for the reasons set out in paragraph 1 of this Article, may be limited in its use.

Article 216

Rights conferred

The holder of a
protected design shall at least have the exclusive right to use it and to
prevent third parties not having his/her consent from using it, in particular
to make, offer, put on the market, import, export or use a product in which the
design is incorporated or to which it is applied, or stocking such a product
for those purposes.

Article 217

Exceptions

1.           The rights conferred by a design right upon
registration shall not be exercised in respect of:

(a)     acts done privately and for
non-commercial purposes;

(b)     acts done for experimental purposes;

(c)     acts of reproduction for the purposes
of making citations or of teaching, provided that such acts are compatible with
fair trade practice and do not unduly prejudice the normal exploitation of the
design, and that mention is made of the source.

2.           In addition, the rights
conferred by a design right upon registration shall not be exercised in respect
of:

(a)     the equipment on ships and aircraft registered
in another country when these temporarily enter the territory of the Party
concerned;

(b)     the importation by the Party concerned
of spare parts and accessories for the purpose of repairing such craft;

(c)     the execution of repairs on such
craft.

3.           A design right shall not
subsist in features of appearance of a product which are solely dictated by its
technical function.

4.           A design right shall not
subsist in features of appearance of a product which must necessarily be
reproduced in their exact form and dimensions in order to permit the product in
which the design is incorporated or to which it is applied to be mechanically
connected to or placed in, around or against another product so that either
product may perform its function.

5.           A
design right shall not
subsist in a design which is contrary to public policy or to accepted
principles of morality.

Article 218

Relationship to copyright

A design protected by a
design right registered in a Party in accordance with this Sub-section shall
also be eligible for protection under the law of copyright of that Party as
from the date on which the design was created or fixed in any form. The extent
to which, and the conditions under which, such protection is conferred,
including the level of originality required, shall be determined by each Party.

Sub-section 5

Patents

Article 219

Patents and public health

1.           The
Parties recognise the
importance of the Declaration on the TRIPS Agreement and Public Health, adopted
on 14 November 2001 (hereinafter referred to as the "Doha
Declaration") by the Ministerial Conference of the WTO. In interpreting
and implementing the rights and obligations under this Chapter, the Parties shall
ensure consistency with the Doha Declaration.

2.           The Parties shall
contribute to the implementation of, and shall
respect, the Decision of the WTO General Council of 30 August 2003 on paragraph
6 of the Doha Declaration.

Article 220

Supplementary
protection certificate

1.           The Parties recognise that
medicinal and plant protection products protected by a patent in their
respective territory may be subject to an administrative authorisation
procedure before being put on their market. They recognise that the period that
elapses between the filing of the application for a patent and the first
authorisation to place the product on their respective market, as defined for
that purpose by the relevant legislation, may
shorten the period of effective protection under the patent.

2.           The Parties shall provide
for a further period of protection for a medicinal or plant protection product
which is protected by a patent and which has been subject to an administrative
authorisation procedure, that period being equal to the period referred to in
paragraph 1, reduced by a period of five years.

3.           In the case of medicinal
products for which paediatric studies have been carried out, and the results of
those studies are reflected in the product information, the Parties shall
provide for a further six-month extension of the period of protection referred
to in paragraph 2 of this Article.

Article 221

Protection
of biotechnological inventions

1.           Parties shall protect
biotechnological inventions under national patent law. They shall, if
necessary, adjust their patent law to take account of the provisions of this
Agreement. This Article shall be without prejudice to the obligations of the Parties
pursuant to international agreements, and in particular the TRIPS Agreement and
the Convention on Biological Diversity of 1992 (hereinafter referred to as the
"CBD").

2.           For the purposes of this
Sub-section:

(a)     "biological material" means
any material containing genetic information and capable of reproducing itself
or being reproduced in a biological system;

(b)     "microbiological process"
means any process involving or performed upon or resulting in microbiological
material.

3.           For the purposes of this
Agreement: inventions which are new, which involve an inventive step and which
are susceptible of industrial application shall be patentable even if they
concern a product consisting of or containing biological material or a process
by means of which biological material is produced, processed or used.

Biological material which is isolated from its
natural environment or produced by means of a technical process may be the
subject of an invention even if it previously occurred in nature.

An element isolated from the human body or
otherwise produced by means of a technical process, including the sequence or
partial sequence of a gene, may constitute a patentable invention, even if the
structure of that element is identical to that of a natural element. The
industrial application of a sequence or a partial sequence of a gene must be
disclosed in the patent application.

4.           The following shall not be
patentable:

(a)     plant and animal varieties;

(b)     essentially biological processes for
the production of plants or animals;

(c)     the human body, at the various stages
of its formation and development, and the simple discovery of one of its
elements, including the sequence or partial sequence of a gene.

Inventions which concern plants or animals
shall be patentable if the technical feasibility of the invention is not
confined to a particular plant or animal variety. Subparagraph (b) of this
paragraph shall be without prejudice to the patentability of inventions which
concern a microbiological or other technical process or a product obtained by
means of such a process.

5.           Inventions shall be
considered unpatentable where their commercial exploitation would be contrary
to ordre public or public morality; however, exploitation shall not be thus
deemed contrary merely because it is prohibited by law or regulation. The
following, in particular, shall be considered unpatentable:

(a)     processes for cloning human beings;

(b)     processes for modifying the germ line
genetic identity of human beings;

(c)     uses of human embryos for industrial
or commercial purposes;

(d)     processes for modifying the genetic
identity of animals which are likely to cause them suffering without any
substantial medical benefit to man or animal, and also animals resulting from
such processes.

6.           The protection conferred
by a patent on a biological material possessing specific characteristics as a
result of an invention shall extend to any biological material derived from
that biological material through propagation or multiplication in an identical
or divergent form and possessing those same characteristics.

7.           The protection conferred
by a patent on a process that enables a biological material possessing specific
characteristics to be produced as a result of an invention shall extend to
biological material directly obtained through that process and to any other
biological material derived from the directly obtained biological material
through propagation or multiplication in an identical or divergent form and
possessing those same characteristics.

8.           The protection conferred
by a patent on a product containing or consisting of genetic information shall
extend to all material, save as provided in paragraph 4(c) of this Article, in
which the product is incorporated and in which the genetic information is
contained and performs its function.

9.           The
protection referred to in paragraphs 7 and 8 of this Article shall not extend
to biological material obtained from the propagation or multiplication of
biological material placed on the market in the territory of the Parties by the
holder of the patent or with his/her consent, where the multiplication or
propagation necessarily results from the application for which the biological
material was marketed, provided that the material obtained is not subsequently
used for other propagation or multiplication.

10.         By way of derogation from
paragraphs 7 and 8 of this Article, the sale or any other form of
commercialisation of plant propagating material to a farmer by the holder of
the patent or with his/her consent for agricultural use implies authorisation
for the farmer to use the product of his/her harvest for propagation or
multiplication by him/her on his/her own farm. The extent and conditions of
this derogation shall correspond to the conditions provided for in the Parties'
national laws, regulations and practices concerning plant variety rights.

By way of derogation from paragraphs 7 and 8 of
this Article, the sale or any other form of commercialisation of breeding stock
or other animal reproductive material to a farmer by the holder of the patent
or with his/her consent implies authorisation for the farmer to use the
protected livestock for an agricultural purpose. This includes making the
animal or other animal reproductive material available for the purposes of
pursuing agricultural activity but not sale within the framework or for the
purpose of a commercial reproduction activity. The extent and the conditions of
the derogation provided for above shall be determined by national laws,
regulations and practices.

11.         The Parties shall provide
for compulsory cross-licensing in the following cases:

(a)     where a breeder cannot acquire or
exploit a plant variety right without infringing a prior patent, he/she may
apply for a compulsory licence for non-exclusive use of the invention protected
by the patent inasmuch as the licence is necessary for the exploitation of the
plant variety to be protected, subject to payment of an appropriate royalty.
The Parties shall provide that, where such a licence is granted, the holder of
the patent will be entitled to a cross-licence on reasonable terms to use the
protected variety;

(b)     where the holder of a patent
concerning a biotechnological invention cannot exploit it without infringing a
prior plant variety right, he/she may apply for a compulsory licence for
non-exclusive use of the plant variety protected by that right, subject to
payment of an appropriate royalty. The Parties shall provide that, where such a
licence is granted, the holder of the variety right will be entitled to a
cross-licence on reasonable terms to use the protected invention.

12.         Applicants for the licences
referred to in paragraph 11 of this Article must demonstrate that:

(a)     they have applied unsuccessfully to the
holder of the patent or of the plant variety right to obtain a contractual
licence;

(b)     the plant variety or the invention
constitutes significant technical progress of considerable economic interest
compared with the invention claimed in the patent or the protected plant
variety.

Article 222

Protection of data submitted to obtain an authorisation to
put a medicinal product on the market

1.           The Parties shall
implement a comprehensive system to guarantee the confidentiality,
non-disclosure and non-reliance of data submitted for the purpose of obtaining
an authorisation to put a medicinal product on the market.

2.           For
that purpose, when a Party requires the submission of test data or studies
concerning the safety and efficacy of a medicinal product prior to granting
approval for the marketing of such product, the Party shall not, for a period of
at least five years from the date of the first
approval in that Party, permit other
applicants to market the same or a similar product, on the basis of the
marketing approval granted to the applicant which had provided the test data or
studies, unless the applicant which had provided the test data or studies has
given consent. During such period, the test data or studies submitted
for the first approval will not be used for the benefit of any subsequent
applicant aiming to obtain a marketing approval for a medicinal product, except
when the consent of the first applicant is given.

3.           Ukraine
shall undertake to align its legislation concerning data protection for medicinal
products with that of the EU at a date to be decided by the Trade Committee.

Article 223

Data protection on plant protection products

1.           The Parties shall determine safety and efficacy
requirements before authorising the placing on the market of plant protection
products.

2.           The Parties shall
recognise a temporary right to the owner of a test or study report submitted
for the first time to achieve a marketing authorisation for a plant protection
product. During such period, the test or study report will not be used for the
benefit of any other person aiming to obtain a marketing authorisation for a
plant protection product, except when the explicit consent of the first owner
is given. This right will be hereinafter
referred to as "data protection".

3.           The Parties shall
determine the conditions to be fulfilled by the test or study report.

4.           The period of data
protection should be at least 10 years starting from the date of the first
authorisation in the Party concerned. The Parties may decide to provide an
extension of the period of protection for low-risk plant protection products.
In such a situation, the period can be extended to 13 years.

5.           The Parties may decide
that those periods shall be extended for each extension of authorisation for
minor uses[38].
In such a situation, the total period of data protection may in no case exceed
13 years or, for low-risk plant protection products, 15 years.

6.           A test or study shall also
be protected if it was necessary for the renewal or review of an authorisation.
In those cases, the period for data protection shall be 30 months.

7.           Rules to avoid duplicative
testing on vertebrate animals will be laid down by the Parties. Any applicant
intending to perform tests and studies involving vertebrate animals shall take
the necessary measures to verify that those tests and studies have not already
been performed or initiated.

8.           A new applicant and the
holder or holders of the relevant authorisations shall make every effort to
ensure that they share tests and studies involving vertebrate animals. The
costs of sharing the test and study reports shall be determined in a fair,
transparent and non-discriminatory way. A new applicant is only required to
share in the costs of information he/she is required to submit to meet the
authorisation requirements.

9.           Where the new applicant
and the holder or holders of the relevant authorisations of plant protection
products cannot reach agreement on the sharing of test and study reports
involving vertebrate animals, the new applicant shall inform the Party.

10.         Failure to reach agreement
shall not prevent the Party concerned from using the test and study reports
involving vertebrate animals for the purpose of the application of the new
applicant.

11.         The holder or holders of
the relevant authorisation shall have a claim on the new applicant for a fair share
of the costs incurred by him/her. The Party concerned may direct the parties
involved to resolve the matter by formal and binding arbitration administered
under national law.

Sub-section 6

Topographies of semiconductor products

Article 224

Definition

For the purposes of this Sub-section:

(a)          "semiconductor product"
shall mean the final or an intermediate form of any product:

consisting of a body of material which includes
a layer of semiconducting material; and having one or more other layers
composed of conducting, insulating or semiconducting material, the layers being
arranged in accordance with a predetermined three-dimensional pattern; and
intended to perform, exclusively or together with other functions, an
electronic function;

(b)          the "topography" of a semiconductor product
shall mean a series of related images, however fixed or encoded;

representing the three-dimensional pattern of
the layers of which a semiconductor product is composed; and in which series,
each image has the pattern or part of the pattern of a surface of the
semiconductor product at any stage of its manufacture;

(c)          "commercial
exploitation" means the sale, rental, leasing or any other method of
commercial distribution, or an offer for these purposes. However, for the
purposes of Article 227 of this Agreement, commercial exploitation shall not
include exploitation under conditions of confidentiality to the extent that no
further distribution to third parties occurs.

Article 225

Requirements
for protection

1.           The Parties shall
protect the topographies of semiconductor products by adopting legislative
provisions conferring exclusive rights in accordance with the provisions of
this Article.

2.           The Parties shall provide
for the protection of the topography of a semiconductor in so far as it
satisfies the conditions that it is the result of its creator's own
intellectual effort and is not commonplace in the semiconductor industry. Where
the topography of a semiconductor product consists of elements that are
commonplace in the semiconductor industry, it shall be protected only to the
extent that the combination of such elements, taken as a whole, fulfils the
abovementioned conditions.

Article 226

Exclusive
rights

1.           The exclusive rights
referred to in Article 225 (1) of this Agreement shall include the right to
authorise or prohibit any of the following acts:

(a)     reproduction of a topography in so far
as it is protected under Article 225 (2) of this Agreement;

(b)     commercial exploitation or the
importation for that purpose of a topography or of a semiconductor product
manufactured by using the topography.

2.           The exclusive rights
referred to in paragraph 1 (a) of this Article shall not apply to reproduction
for the purpose of analysing, evaluating or teaching the concepts, processes,
systems or techniques embodied in the topography or the topography itself.

3            The exclusive rights
referred to in paragraph 1 of this Article shall not extend to any such act in
relation to a topography meeting the requirements of Article 225(2) of this
Agreement and created on the basis of an analysis and evaluation of another
topography, carried out in conformity with paragraph 2 of this Article.

4.           The exclusive rights to
authorise or prohibit the acts specified in paragraph 1 (b) of this Article shall
not apply to any such act committed after the topography or the semiconductor
product has been lawfully put on the market.

Article 227

Term
of protection

The exclusive rights shall amount to at
least 10 years from when the topography is first commercially exploited
anywhere in the world or, where registration is a condition for the coming into
existence or continuing application of the exclusive rights, 10 years from the
earlier of the following dates:

(a)          the end of the calendar year in
which the topography is first commercially exploited anywhere in the world;

(b)          the end of the calendar year in
which the application for registration has been filed in due form.

Sub-section
7

Other
Provisions

Article 228

Plant varieties

The Parties shall co-operate to promote and
reinforce the protection of plant varieties rights in accordance with the
International Convention for the Protection of New Varieties of Plants of 1961
as revised in Geneva on 10 November 1972, 23 October 1978 and 19 March 1991,
including the optional exception to the breeder's right as referred to in
Article 15.2 of the said Convention.

Article 229

Genetic
resources, traditional knowledge and folklore

1.           Subject to their domestic
legislation, the Parties shall respect, preserve and maintain knowledge,
innovations and practices of indigenous and local communities embodying
traditional lifestyles relevant to the conservation and sustainable use of
biological diversity, and promote their wider application with the involvement
and approval of the holders of such knowledge, innovations and practices and
encourage equitable sharing of the benefits arising from the utilisation of
such knowledge, innovations and practices.

2.           The Parties recognise the
importance of taking appropriate measures, subject to national legislation, to
preserve traditional knowledge and agree to continue working towards the
development of internationally agreed sui generis models for the legal
protection of traditional knowledge.

3.           The Parties agree
that the intellectual property provisions of this Sub-section and the CBD shall
be implemented in a mutually supportive way.

4.           The Parties agree to
regularly exchange views and information on relevant multilateral discussions.

Section
3

Enforcement
of Intellectual Property Rights

Article 230

General
obligations

1.           Both Parties reaffirm
their commitments under the TRIPS Agreement and in particular its Part III, and
shall provide for the following complementary measures, procedures and remedies
necessary to ensure the enforcement of intellectual property rights[39]. These measures, procedures
and remedies shall be fair and equitable, and shall not be unnecessarily
complicated or costly, or entail unreasonable time-limits or unwarranted
delays.

2.           These measures and
remedies shall also be effective, proportionate and dissuasive and shall be
applied in such a manner as to avoid the creation of barriers to legitimate
trade and to provide for safeguards against their abuse.

Article 231

Entitled
applicants

1.           The Parties shall
recognise as persons entitled to seek application of the measures, procedures
and remedies referred to in this Section and in Part III of the TRIPS
Agreement:

(a)     the holders of intellectual property
rights in accordance with the provisions of the applicable law;

(b)     all other persons authorised to use
those rights, in particular licensees, in so far as permitted by and in
accordance with the provisions of the applicable law;

(c)     professional defence bodies which are
regularly recognised as having a right to represent holders of intellectual
property rights, in so far as permitted by and in accordance with the
provisions of the applicable law.

2.           The Parties may recognise
as persons entitled to seek application of the measures, procedures and
remedies referred to in this Section and in Part III of the TRIPS Agreement,
intellectual property collective rights management bodies which are regularly
recognised as having a right to represent holders of intellectual property
rights, in so far as permitted by and in accordance with the provisions of the
applicable law.

Sub-section
1

Civil
Measures, Procedures and Remedies

Article 232

Presumption
of authorship or ownership

The Parties shall recognise that for the
purposes of applying the measures, procedures and remedies provided for in this
Agreement:

(a)          for the author of a literary or
artistic work, in the absence of proof to the contrary, to be regarded as such,
and consequently to be entitled to institute infringement proceedings, it shall
be sufficient for his/her name to appear on the work in the usual manner;

(b)          the provision under (a) of this
Article shall apply mutatis mutandis to the holders of rights related to
copyright with regard to their protected subject matter.

Article 233

Evidence

1.           The judicial authorities of the Parties shall have the authority,
where a party has presented reasonably available evidence sufficient to support
its claims and has in substantiating its claims, specified evidence which lies
in the control of the opposing party, to order that this evidence be produced
by the opposing party, subject to conditions which ensure the protection of
confidential information.

2.           Under
the same
conditions, the Parties shall take such measures as are
necessary, in the case of an infringement of an intellectual property right
committed on a commercial scale, to enable the competent judicial authorities
to order, where appropriate and following an application, the communication of
banking, financial or commercial documents under the control of the opposing
party, subject to the protection of confidential information.

Article 234

Measures
for preserving evidence

1.           The Parties shall ensure
that, even before the commencement of proceedings on the merits of the case,
the competent judicial authorities may, on application by a party who has
presented reasonably available evidence to support the claim that his/her
intellectual property right has been infringed or is about to be infringed,
order prompt and effective provisional measures to preserve relevant evidence
in respect of the alleged infringement, subject to the protection of
confidential information. Such measures may include the detailed description,
with or without the taking of samples, or the physical seizure of the alleged
infringing goods, and, in appropriate cases, the materials and implements used
in the production and/or distribution of these goods and the documents relating
thereto. Those measures shall be taken, if necessary without the other party
being heard, in particular where any delay is likely to cause irreparable harm
to the right holder or where there is a demonstrable risk of evidence being
destroyed.

2.           The Parties shall ensure
that the measures to preserve evidence are revoked or otherwise cease to have
effect, upon request of the defendant, without prejudice to the damages which
may be claimed, if the applicant does not institute, within a reasonable
period, proceedings leading to a decision on the merits before the competent
judicial authority.

Article 235

Right
to information

1.           The
Parties shall ensure that, in the context of proceedings concerning an
infringement of an intellectual property right and in response to a justified
and proportionate request of the claimant, the competent judicial authorities
may order that information on the origin and distribution networks of the goods
or services which infringe an intellectual property right be provided by the
infringer and/or any other person who:

(a)     was found in possession of the
infringing goods on a commercial scale;

(b)     was found to be using the infringing
services on a commercial scale;

(c)     was found to be providing on a
commercial scale services used in infringing activities; or

(d)     was indicated by the person referred
to in subparagraphs (a), (b) or (c) of this paragraph as being involved in the
production, manufacture or distribution of the goods or the provision of the
services.

2.           The
information referred to in paragraph 1 of this Article shall, as appropriate,
comprise:

(a)     the names and addresses of the
producers, manufacturers, distributors, suppliers and other previous holders of
the goods or services, as well as the intended wholesalers and retailers;

(b)     information on the quantities
produced, manufactured, delivered, received or ordered, as well as the price
obtained for the goods or services in question.

3.           Paragraphs
1 and 2 of this Article shall apply without prejudice to other statutory
provisions which:

(a)     grant the right holder rights to
receive fuller information;

(b)     govern the use in civil or criminal
proceedings of the information communicated pursuant to this Article;

(c)     govern responsibility for misuse of
the right of information;

(d)     afford an opportunity for refusing to provide
information which would force a person referred to in paragraph 1 of this
Article to admit to his/her own participation or that of his/her close
relatives in an infringement of an intellectual property right, or

(e)     govern the protection of
confidentiality of information sources or the processing of personal data.

Article 236

Provisional
and precautionary measures

1.           The Parties shall ensure
that the judicial authorities may, at the request of the applicant issue an
interlocutory injunction intended to prevent any imminent infringement of an
intellectual property right, or to forbid, on a provisional basis, and subject,
where appropriate, to a recurring penalty payment where provided for by
domestic law, the continuation of the alleged infringements of that right, or
to make such continuation subject to the lodging of guarantees intended to
ensure the compensation of the right holder. An interlocutory injunction may
also be issued, under the same conditions, against an intermediary whose
services are being used by a third party to infringe an intellectual property
right.

2.           An interlocutory
injunction may also be issued to order the seizure or delivery up of the goods
suspected of infringing an intellectual property right so as to prevent their
entry into or movement within the channels of commerce.

3.           In the case of an
infringement committed on a commercial scale, the Parties shall ensure that, if
the applicant demonstrates circumstances likely to endanger the recovery of
damages, the judicial authorities may order the precautionary seizure of the
movable and immovable property of the alleged infringer, including the blocking
of his/her bank accounts and other assets. To that end, the competent
authorities may order the communication of bank, financial or commercial
documents, or appropriate access to the relevant information.

4.           The Parties shall ensure
that the provisional measures referred to in paragraphs 1, 2 and 3 of this
Article may, in appropriate cases, be taken without the defendant having been
heard, in particular where any delay would cause irreparable harm to the right
holder. In that event, the Parties shall be so informed without delay after the
execution of the measures at the latest. A review, including a right to be
heard, shall take place upon request of the defendant with a view to deciding,
within a reasonable time after notification of the measures, whether those
measures shall be modified, revoked or confirmed.

5.           The Parties shall ensure
that the provisional measures referred to in paragraphs 1, 2 and 3 of this Article
are revoked or otherwise cease to have effect, upon request of the defendant,
if the applicant does not institute, within a reasonable period, proceedings
leading to a decision on the merits of the case before the competent judicial
authority.

6.           Where the provisional
measures are revoked or where they lapse due to any act or omission by the
applicant, or where it is subsequently found that there has been no
infringement or threat of infringement of an intellectual property right, the
judicial authorities shall have the authority to order the applicant, upon
request of the defendant, to provide the defendant appropriate compensation for
any injury caused by those measures.

Article 237

Corrective
measures

1.           The Parties shall ensure that the competent judicial
authorities may order, at the request of the applicant and without prejudice to
any damages due to the right holder by reason of the infringement, and without
compensation of any sort, the recall from the channels of commerce, the
definitive removal from the channels of commerce or the destruction of goods
that they have found to be infringing an intellectual property right. If
appropriate, the competent judicial authorities may also order destruction of
materials and implements principally used in the creation or manufacture of
those goods.

2.           The judicial authorities
shall order that those measures shall be carried out at the expense of the
infringer, unless particular reasons are invoked for not doing so.

Article 238

Injunctions

The Parties shall ensure that, where a
judicial decision is taken finding an infringement of an intellectual property
right, the judicial authorities may issue against the infringer an injunction
aimed at prohibiting the continuation of the infringement. Where provided for
by domestic law, non-compliance with an injunction shall, where appropriate, be
subject to a recurring penalty payment, with a view to ensuring compliance. The
Parties shall also ensure that right holders are in a position to apply for an
injunction against intermediaries whose services are used by a third party
to infringe an intellectual property right.

Article 239

Alternative measures

The Parties may provide that, in
appropriate cases and at the request of the person liable to be subject to the
measures provided for in Article 237 and/or Article 238 of this Agreement, the
competent judicial authorities may order pecuniary compensation to be paid to
the injured party instead of applying the measures provided for in Article 237
and/or Article 238 of this Agreement if that person acted unintentionally and
without negligence, if execution of the measures in question would cause him
disproportionate harm and if pecuniary compensation to the injured party
appears reasonably satisfactory.

Article 240

Damages

1.           The Parties shall ensure that when the
judicial authorities set damages:

(a)     they shall take into account all
appropriate aspects, such as the negative economic consequences, including lost
profits, which the injured party has suffered, any unfair profits made by the
infringer and, in appropriate cases, elements other than economic factors, such
as the moral prejudice caused to the right holder by the infringement; or

(b)     as an alternative to subparagraph (a)
of this paragraph, they may, in appropriate cases, set the damages as a lump
sum on the basis of elements such as at least the amount of royalties or fees
which would have been due if the infringer had requested authorisation to use
the intellectual property right in question.

2.           Where the infringer did
not knowingly, or with reasonable grounds to know, engage in infringing
activity, the Parties may lay down that the
judicial authorities may order in favour of the injured party the recovery of
profits or the payment of damages which may be pre-established.

Article 241

Legal costs

The Parties shall ensure that reasonable and
proportionate legal costs and other expenses incurred by the successful party
shall as a general rule be borne by the unsuccessful party, unless equity does
not allow this.

Article 242

Publication of judicial decisions

The Parties shall ensure that, in legal
proceedings instituted for infringement of an intellectual property right, the
judicial authorities may order, at the request of the applicant and at the
expense of the infringer, appropriate measures for disseminating the
information concerning the decision, including displaying the decision and
publishing it in full or in part. The Parties may provide for other additional
publicity measures which are appropriate to the particular circumstances,
including prominent advertising.

Article 243

Administrative procedures

To the extent that any civil remedy can be
ordered as a result of administrative procedures on the merits of a case, such
procedures shall conform to principles equivalent in substance to those set
forth in the relevant provisions of this Sub-section.

Sub-section 2

Liability of Intermediary Service Providers

Article 244

Use of intermediaries' services

Both Parties recognise
that the services of intermediaries may be used by third parties for
infringement-related activities. To ensure the free movement of information
services and at the same time enforce intellectual property rights in the
digital environment, each Party shall provide for the following measures in
respect of intermediary service providers. This Sub-section only applies to
liability that could result from infringements in the field of intellectual
property rights, in particular copyright[40].

Article 245

Liability of intermediary service providers: "Mere conduit"

1.           Where an information
society service that is provided consists of the transmission in a
communication network of information provided by a recipient of the service, or
the provision of access to a communication network, the Parties shall ensure that
the service provider is not liable for the information transmitted, on
condition that the provider:

(a)     does not initiate the transmission;

(b)     does not select the receiver of the
transmission; and

(c)     does not select or modify the
information contained in the transmission.

2            The acts of transmission
and of provision of access referred to in paragraph 1 of this Article include
the automatic, intermediate and transient storage of the information
transmitted in so far as this takes place for the sole purpose of carrying out
the transmission in the communication network, and provided that the
information is not stored for any period longer than is reasonably necessary
for such transmission.

3            This Article shall not
affect the possibility for a court or administrative authority, in accordance
with the Parties legal systems, to require the service provider to terminate or
prevent an infringement.

Article 246

Liability of intermediary service providers: "Caching"

1            Where an information
society service that is provided consists of the transmission in a
communication network of information provided by a recipient of the service, the
Parties shall ensure that the service provider is not liable for the automatic,
intermediate and temporary storage of that information, performed for the sole
purpose of making more efficient the information's onward transmission to other
recipients of the service at their request, on condition that:

(a)     the provider does not modify the
information;

(b)     the provider complies with conditions
on access to the information;

(c)     the provider complies with rules
regarding the updating of the information, specified in a manner widely
recognised and used by industry;

(d)     the provider does not interfere with
the lawful use of technology, widely recognised and used by industry, to obtain
data on the use of the information; and

(e)     the provider acts expeditiously to
remove or to disable access to the information it has stored upon obtaining
actual knowledge of the fact that the information at the initial source of the
transmission has been removed from the network, or access to it has been
disabled, or that a court or an administrative authority has ordered such
removal or disablement.

2.           This Article shall not
affect the possibility for a court or administrative authority, in accordance
with Parties' legal systems, of requiring the service provider to terminate or
prevent an infringement.

Article 247

Liability of intermediary service providers: "Hosting"

1.           Where an information
society service is provided that consists of the storage of information
provided by a recipient of the service, the Parties shall ensure that the
service provider is not liable for the information stored at the request of a
recipient of the service, on condition that:

(a)     the provider does not have actual
knowledge of illegal activity or information and, as regards claims for
damages, is not aware of facts or circumstances from which the illegal activity
or information is apparent; or

(b)     the provider, upon obtaining such
knowledge or awareness, acts expeditiously to remove or to disable access to
the information.

2.           Paragraph 1 of this
Article shall not apply when the recipient of the service is acting under the
authority or the control of the provider.

3.           This Article shall not affect
the possibility for a court or administrative authority, in accordance with the
Parties’ legal systems, to require the service provider to terminate or prevent
an infringement, nor does it affect the possibility of the Parties establishing
procedures governing the removal or disablement of access to information.

Article 248

No general obligation to monitor

1.           The Parties shall not
impose, on providers of services covered by Articles 245, 246 and 247 of this
Agreement, a general obligation to monitor the information which they transmit
or store, nor a general obligation actively to seek facts or circumstances
indicating illegal activity.

2.           The Parties may establish
obligations for information society service providers promptly to inform the
competent public authorities of alleged illegal activities undertaken or
information provided by recipients of their service or obligations to
communicate to the competent authorities, at their request, information
enabling the identification of recipients of their service with whom they have
storage agreements.

Article 249

Transitional period

Ukraine shall
fully implement the obligations of this Sub-section within
18 months from the date this Agreement enters into force.

Sub-section 3

Other Provisions

Article 250

Border measures

1.           For the purposes of this
provision, “goods infringing an intellectual property right” means:

(a)     "counterfeit goods", namely:

(i)      goods, including packaging, bearing
without authorisation a trade-mark which is identical to a trade-mark duly
registered in respect of the same type of goods, or which cannot be
distinguished in its essential aspects from such a trade-mark, and which
thereby infringes the trade-mark holder's rights;

(ii)      any trade-mark symbol (logo, label,
sticker, brochure, instructions for use or guarantee document), even if
presented separately, on the same conditions as apply to the goods referred to
in subparagraph (i);

(iii)     packaging materials bearing the trade-marks
of counterfeit goods, presented separately, on the same conditions as apply to the
goods referred to in subparagraph (i);

(b)     "pirated goods", namely
goods which are or contain copies made without the consent of the holder, or of
a person duly authorised by the holder in the country of production, of a
copyright or related right or design right, regardless of whether it is
registered in domestic law;

(c)     goods which, according to the law of
the Party in which the application for customs action is made, infringe:

(i)      a patent;

(ii)      a supplementary protection certificate

(iii)     a plant variety right;

(iv)     a design;

(v)     a geographical indication.

2.           The
Parties shall, unless otherwise provided for in this Sub-section, adopt
procedures[41]
to enable a right holder who has valid grounds for suspecting that the importation, exportation,
re-exportation, entry into or exit from the customs territory, placement under
a suspensive procedure or placement in a free zone or a free warehouse of goods
infringing an intellectual property right may take place, to lodge an
application in writing with the competent authorities, administrative or
judicial, for suspension by the customs authorities of the release into free
circulation or the detention of such goods.

3.           The
Parties shall provide that when the customs authorities, in the course of their
actions and before an application has been lodged by a right holder or granted,
have sufficient grounds for suspecting that goods infringe an intellectual
property right, they may suspend the release of the goods or detain them in
order to enable the right holder to submit an application for action in
accordance with the previous paragraph.

4.           Any
rights or duties established in Section 4 of Part III of the TRIPS Agreement
concerning the importer shall be also applicable to the exporter or to the
holder of the goods.

5.           The
Parties shall cooperate with a view to the provision of technical assistance
and capacity building for the implementation of this Article.

6.           Ukraine
shall fully implement the obligation of this Article within three years after
the date on which this Agreement enters into force.

Article 251

Codes
of conduct and forensic cooperation

The Parties shall
encourage:

(a)          the development by trade or
professional associations or organisations of codes of conduct aimed at
contributing towards the enforcement of intellectual property rights;

(b)          the submission to the competent
authorities of the Parties of draft codes of conduct and of any evaluations of
the application of these codes of conduct.

Article 252

Cooperation

1.           The
Parties agree to cooperate
with a view to supporting implementation of the commitments and obligations
undertaken under this Chapter.

2.           Subject to the provisions
of Title V (Economic and Sector Co-operation) and in line with the provisions
of Title VI (Financial Cooperation, with Anti-Fraud Provisions) of this Agreement, areas of co-operation include, but are
not limited to, the following activities:

(a)     exchange of information on the legal
framework concerning intellectual property rights and relevant rules of protection
and enforcement; exchange of experiences in the EU Party and Ukraine concerning
legislative progress;

(b)     exchange of experiences in the EU
Party and Ukraine concerning enforcement of intellectual property rights;

(c)     exchange of experiences in the EU
Party and Ukraine concerning central and sub-central enforcement by customs,
police, administrative and judiciary bodies; co-ordination to prevent exports
of counterfeit goods, including with other countries;

(d)     capacity-building; exchange and training
of personnel;

(e)     promotion and dissemination of
information on intellectual property rights in, inter alia, business
circles and civil society; public awareness of consumers and right holders;

(f)      enhancement of institutional
co-operation, for example between intellectual property offices;

(g)     actively promoting awareness and
education of the general public about intellectual property rights policies:
formulating effective strategies to identify key audiences and creating
communication programmes to increase consumer and media awareness of the impact
of intellectual property violations, including the risk to health and safety
and the connection with organised crime.

3.           Without prejudice and as a
complement to paragraphs 1 and 2 of this Article, the Parties agree to maintain
an effective dialogue on intellectual property issues ("IP
Dialogue"), which will report to the Trade Committee, to address topics
relevant to the protection and enforcement of intellectual property rights
covered by this Chapter, and also any other relevant issue.

CHAPTER 10

Competition

Section 1

Antitrust
and Mergers

Article 253

Definitions

For the
purposes of this Section:

1.           “competition authority”
means:

(a)     for the EU Party, the European
Commission; and

(b)     for Ukraine the Anti-Monopoly
Committee of Ukraine.

2.           "competition
laws" means:

(a)     for the EU Party, Articles 101, 102
and 106 of the Treaty on the Functioning of the European Union, Council
Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations
between undertakings (the EU Merger Regulation), and their implementing
regulations and amendments;

(b)     for Ukraine, Law
N° 2210-III of 11 January 2001 (with amendments) and its implementing
regulations and amendments. In the event of conflict between a provision of Law
N° 2210-III and another substantive provision on competition Ukraine shall ensure that the former shall
prevail to the extent of the conflict; as well
as

(c)     any changes that
the abovementioned instruments may undergo after the entry into force of this
Agreement.

3.           Annex
XXIII contains explanations
of certain other terms used in this Section.

Article 254

Principles

The Parties
recognise the importance of free and undistorted competition in their trade
relations. The Parties acknowledge that anti-competitive business practices and
transactions have the potential to distort the proper functioning of markets
and generally undermine the benefits of trade liberalisation. They therefore
agree that the following practices and transactions, as specified in their
respective competition laws, are inconsistent with this Agreement, in so far as
they may affect trade between the Parties:

(a)          agreements, concerted practices and
decisions by associations of undertakings, which have the object or effect of
impeding, restricting, distorting or substantially lessening competition in the
territory of either Party;

(b)          the abuse by one or more
undertakings of a dominant position in the territory of either Party; or;

(c)          concentrations between undertakings, which result in monopolization
or a substantial restriction of competition in the market in the territory of
either Party.

Article 255

Implementation

1.           The EU Party and Ukraine
shall maintain competition laws which effectively address the practices and
transactions referred to in Article 254(a) (b) and (c) above.

2.           The Parties shall maintain
authorities responsible for and appropriately equipped for the effective enforcement of the
above-mentioned competition laws.

3.           The Parties recognise the
importance of applying their respective competition laws in a transparent,
timely and non-discriminatory manner, respecting the principles of procedural
fairness and rights of defence. Each Party in particular shall
ensure that:

(a)     before a competition authority of one of
the Parties imposes a sanction or remedy against any natural or legal person
for violating its competition law, it affords the person the right to be heard
and to present evidence within a reasonable time to be defined in the
respective competition laws of the Parties after it has communicated to the
natural or legal person concerned its provisional conclusions as to the
existence of the violation; and

(b)     a court or other independent tribunal
established under that Party's laws imposes or, at the person's request,
reviews any such sanction or remedy.

4.           Upon request of a Party,
each Party shall make available to the other Party public information
concerning enforcement activities of its competition laws and legislation
related to the obligations covered by this Section.

5.           The competition authority
shall adopt and publish a document explaining the principles to be used in the
setting of any pecuniary sanctions imposed for infringements of the competition
laws.

6.           The competition authority
shall adopt and publish a document explaining the principles used in the
assessment of horizontal mergers.

Article 256

Approximation of law and enforcement practice

Ukraine shall
approximate its competition laws and enforcement practices to the part of the
EU acquis as set out below:

1.           Council Regulation (EC) No
1/2003 of 16 December 2002 on the implementation of the rules on competition
laid down in Articles 81 and 82 of the Treaty.

Timetable:

Article 30 of the Regulation shall be
implemented within three
years of the entry into force of this Agreement.

2.           Council Regulation (EC) No
139/2004 of 20 January 2004 on the control of concentrations between
undertakings (the EU Merger Regulation).

Timetable:

Articles 1 and Article 5(1) and (2) of the
Regulation shall be implemented within three years of the entry into force of
this Agreement.

Article
20 shall be implemented within three years of the
entry into force of this Agreement

3.           Commission Regulation (EU)
No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty
on the Functioning of the European Union to categories of vertical agreements
and concerted practices.

Timetable:

Articles 1, 2, 3, 4, 6, 7 and 8 of the
Regulation shall be implemented within three years of the entry into force of this Agreement.

4.           Commission Regulation (EC)
No 772/2004 of 27 April 2004 on the application of Article 81 (3) of the Treaty
to categories of technology transfer agreements.

Timetable:

Articles 1, 2, 3, 4, 5, 6, 7 and 8 of the
Regulation shall be implemented within three years of the entry into force of this
Agreement.

Article 257

Public enterprises and enterprises entrusted with special or
exclusive rights

1.           With
respect to public enterprises and enterprises entrusted with special or
exclusive rights:

(a)     neither Party shall enact or maintain in force any measure contrary to the
principles contained in Articles 254 and Article 258(1) of this Agreement; and

(b)     the Parties shall ensure that such
enterprises are subject to the competition laws referred to in Article 253(2) of this Agreement

insofar as the application of the above-mentioned competition
laws and principles does not
obstruct the performance, in law or in fact, of the particular tasks assigned
to the enterprises in question.

2.           Nothing in the previous
paragraph shall be construed as preventing a Party from establishing or
maintaining a public enterprise, entrusting enterprises with special or
exclusive rights or maintaining such rights.

Article 258

State monopolies

1.           Each Party shall adjust
state monopolies of a commercial character within a period of five years from
the entry into force of this Agreement, so as to ensure that no discriminatory
measures regarding the
conditions under which goods are procured and marketed exist between natural
and legal persons of the Parties.

2.           Nothing in this Article
shall prejudge the rights and obligations of the Parties under the Public
Procurement Chapter.

3.           Nothing in paragraph 1
shall be construed as preventing a Party from establishing or maintaining a state
monopoly.

Article 259

Exchange of information and enforcement cooperation

1.           The Parties recognise the
importance of co-operation and co-ordination between their respective
competition authorities to further enhance effective competition law enforcement,
and to fulfil the objectives of this Agreement through the promotion of
competition and the curtailment of anti-competitive business conduct or anti-competitive transactions.

2.           To this end, the
competition authority of a Party may inform the competition authority of the
other Party of its willingness to cooperate with respect to enforcement
activity. This cooperation shall not prevent the Parties from taking
independent decisions.

3.           With a view to
facilitating the effective application of their respective competition laws,
the competition authorities of the Parties may exchange information including
on legislation and enforcement activities, within the limits imposed by
their respective legislations and taking into account their essential
interests.

Article 260

Consultations

1.           Each Party shall, at the
request of the other Party, enter into consultations regarding representations
made by the other Party, to foster mutual understanding or to address specific
matters that arise under this Section. The requesting Party shall indicate how
the matter affects trade between the Parties.

2.           The Parties shall promptly
discuss, at the request of either Party, any questions arising from the
interpretation or application of this Section.

3.           To facilitate discussion
of the matter that is the subject of the consultations, each Party shall
endeavour to provide relevant non-confidential information to the other Party,
within the limits imposed by their respective legislations and taking into
account their essential interests.

Article 261

No Party may have recourse to dispute
settlement under Chapter 14 (Dispute Settlement) of Title IV of this Agreement with
respect to any issue arising under this Section, with the exception of Article
256 of this Agreement.

Section
2

State
Aid

Article 262

General
principles

1.           Any aid granted by Ukraine
or the Member States of the European Union through state resources which
distorts or threatens to distort competition by favouring certain undertakings
or the production of certain goods is incompatible with the proper functioning
of this Agreement insofar as it may affect trade between the Parties.

2.           However, the following
shall be compatible with the proper functioning of this agreement:

(a)     aid having a social character, granted
to individual consumers, provided that such aid is granted without
discrimination related to the origin of the products concerned;

(b)     aid to make good the damage caused by
natural disasters or exceptional occurrences.

3.           Moreover, the following
may be considered to be compatible with the proper functioning of this
Agreement:

(a)     aid to promote the economic
development of areas where the standard of living is abnormally low or where
there is serious underemployment;

(b)     aid to promote the execution of an important
project in the common European interest[42] or to remedy a serious
disturbance in the economy of one of the Member States of the European Union or
Ukraine;

(c)     aid to
facilitate the development of certain economic activities or of certain
economic areas where such aid does not adversely affect trading conditions
contrary to the interests of the Parties;

(d)     aid to promote culture and heritage
conservation where such aid does not adversely affect trading conditions
contrary to the interests of the Parties;

(e)     aid to achieve objectives allowed
under the EU horizontal block exemption regulations and horizontal and sectoral
state aid rules granted in line with the conditions set out therein;

(f)      aid for investment to comply with the
mandatory standards of the EU directives listed in Annex XXIX to Chapter 6
(Environment) of Title V of this Agreement, within the implementation period
provided for therein, and involving adaptation of plant and equipment to meet
the new requirements, can be authorised up to the level of 40 % gross of the
eligible costs.

4.           Undertakings entrusted
with the operation of services of general economic
interest or having the character of a revenue-producing monopoly shall
be subject to the rules contained in this Section, in so far as the application
of such rules does not obstruct the performance, in law or in fact, of the
particular tasks assigned to them. The development of trade must not be
affected to such an extent as would be contrary to the interests of the
Parties.

Annex XXIII contains explanations of certain
terms used in this Section.

Article 263

Transparency

1.           Each Party shall ensure
transparency in the area of state aid. To this end, each Party
shall notify annually to the other Party the total amount, types and the sectoral distribution of state aid which may affect trade between the
Parties. Respective notifications should contain information concerning the
objective, form, the amount or
budget, the granting authority and where possible the recipient of the aid. For
the purposes of this Article, any aid below the threshold of EUR 200.000 per
undertaking over three years does not need to be notified. Such notification is deemed to have been provided if it is sent to
the other Party, or if the relevant information is made available on a publicly
accessible internet website, by 31 December of the subsequent calendar year.

2.           Upon request by a Party,
the other Party shall provide further information on any state aid scheme and
particular individual cases of state aid affecting trade between the Parties.
The Parties shall exchange this information taking into account the limitations
imposed by the requirements of professional and business secrecy.

3.           The Parties shall ensure
that financial relations between public authorities and public undertakings are
transparent, so that the following emerge clearly:

(a)     public funds made available directly
or indirectly (for example through the intermediary of public undertakings or
financial institutions) by public authorities to the public undertakings
concerned;

(b)     the use to which these public funds
are actually put into.

4.           The
Parties shall moreover ensure that the financial and organisational structure
of any undertaking that
enjoys a special or exclusive right granted by Ukraine or the Member
States of the European Union or is entrusted with the
operation of a service of general economic interest, that receives public
service compensation in any form whatsoever in relation to such service, is
correctly reflected in separate accounts, so that the following emerge clearly:

(a)     the costs and revenues associated with
all products or services in respect of which a special or exclusive right is
granted to an undertaking or all services of general economic interest with
which an undertaking is entrusted and, on the other hand, each other separate
product or service in respect of which the undertaking is active;

(b)     full details of the methods by which
costs and revenues are assigned or allocated to different activities. These
methods shall operate on the basis of accounting principles of causality,
objectivity, transparency and consistency, according to internationally
recognised accounting methodologies such as activity based costing, and be
based on audited data.

5.           Each
Party shall ensure that the provisions of this Article are applied within five
years from the entry into force of this Agreement.

Article 264

Interpretation

The Parties
agree that they will apply Article 262, Article 263(3) or Article 263(4) of
this Agreement using as sources of interpretation the criteria arising from the
application of Articles 106, 107 and 93 of the Treaty on the Functioning of the
European Union, including the relevant jurisprudence of the Court of Justice of
the European Union, as well as relevant secondary legislation, frameworks,
guidelines and other administrative acts in force in the European Union.

Article 265

Relationship
with WTO

These provisions are without prejudice to
the right of the Parties to apply trade remedies or other appropriate action
against a subsidy or have recourse to dispute settlement in accordance with the
relevant WTO provisions.

Article 266

Scope

The provisions of this Section shall apply to goods and to those services which have been listed in Annex XVI to Chapter
6 (Establishment, Trade in Services and Electronic Commerce) of Title IV of
this Agreement, in accordance with the mutually agreed decision on market
access, with the exception of subsidies to products covered by Annex 1 to the
WTO Agreement on Agriculture and other subsidies covered by the Agreement on
Agriculture.

Article 267

Domestic
system of state aid control

To comply with the obligations of Articles 262 to 266 of this Agreement:

1.           Ukraine shall in particular adopt national state aid legislation, and
establish an operationally independent authority which is entrusted with the
powers necessary for the full application of Article 262 of this Agreement within
three years from the date of entry into force of this Agreement. This authority
shall have, inter alia, the powers to authorise state aid schemes and
individual aid grants in conformity with the criteria referred to in Articles
262 and 264 of this Agreement as well as the powers to order the recovery of
state aid that has been unlawfully granted. Any new aid granted in Ukraine must
be consistent with the provisions of Articles 262 and 264 of this Agreement
within one year from the date of establishment of the authority.

2.           Ukraine shall establish
within five years from the date of entry into force of this Agreement a
comprehensive inventory of aid schemes instituted before the establishment of
the authority referred to in paragraph 1 and shall align such aid schemes with
the criteria referred to in Articles 262 and 264 of this Agreement within a
period of no more than seven years from the entry into force of this Agreement.

3.           (a)     For the purposes of
applying Article 262 of this Agreement, the Parties recognise that during the
first five years after the entry into force of this Agreement, any public aid
granted by Ukraine shall be assessed taking into account the fact that Ukraine
shall be regarded as an area identical to those areas of the European Union described
in Article 107(3)(a) of the Treaty on the Functioning of the European Union.

(b)     Within four years of the entry
into force of this Agreement, Ukraine shall submit to the European Commission
its gross domestic product per capita figures harmonised at NUTS II
level. The authority referred to in paragraph 1 of this Article and the
European Commission shall then jointly evaluate the eligibility of the regions
of Ukraine as well as the maximum aid intensities in relation thereto in order
to draw up the regional aid map on the basis of the relevant EU guidelines.

CHAPTER 11

Trade-Related
Energy

Article 268

Definitions

For the
purposes of this Chapter, and without prejudice to the provisions set out in
Chapter 5 (Customs and Trade Facilitation) of Title IV of this Agreement:

1            "energy goods"
means natural gas (HS code 27.11), electrical energy (HS code 27.16) and crude
oil (HS code: 27.09);

2.           "fixed
infrastructure" means any transmission or distribution network, Liquefied
Natural Gas facility and storage facility, as defined in Directive 2003/54/EC
of the European Parliament and of the Council of 26 June 2003 concerning common
rules for the internal market in electricity (hereinafter referred to as
"Directive 2003/54/EC") and Directive 2003/55/EC of the European
Parliament and of the Council of 26 June 2003 concerning common rules for the
internal market in natural gas (hereinafter referred to as "Directive
2003/55/EC);

3.           "transit" means
transit, as described in Chapter 5 (Customs and Trade Facilitation) of Title IV
of this Agreement, of energy goods through a fixed infrastructure or oil
pipeline;

4.           "transport"
means transmission and distribution, as defined in Directive 2003/54/EC and
Directive 2003/55/EC, and the carriage or conveyance of oil through pipelines;

5.           "unauthorised
taking" means any activity consisting in unlawful taking of energy goods
from fixed infrastructure.

Article 269

Domestic
regulated prices

1.           The price for the supply
of gas and electricity to industrial consumers shall be determined solely by
supply and demand.

2.           By way of derogation from
paragraph 1 of this Article,
the Parties may impose in the general economic interest[43] an obligation on undertakings
which relates to the price of supply of gas and electricity, (hereinafter
referred to as "regulated price").

3.           The Parties shall ensure
that this obligation is clearly defined, transparent, proportionate,
non-discriminatory, verifiable and of limited duration. In applying this
obligation, the Parties shall also guarantee equality of access to consumers
for other undertakings.

4.           Where the price, at which
gas and electricity are sold on the domestic market, is regulated, the Party
concerned shall ensure that the methodology underlying the calculation of the
regulated price is published prior to the entry into force of the regulated
price.

Article 270

Prohibition
of dual pricing

1.           Without prejudice to the
possibility to impose domestic regulated prices consistently with paragraphs 2
and 3 of Article 269 of this Agreement, neither Party or a regulatory authority
thereof, shall adopt or maintain a measure resulting in a higher price for exports
of energy goods to the other Party than the price charged for such goods when
intended for domestic consumption.

2.           The exporting Party shall at
the request of the other Party provide evidence that a different price for the
same energy goods sold on the domestic market and for export does not result
from a measure prohibited by paragraph 1 of this
Article.

Article 271

Customs
duties and quantitative restrictions

1.           Customs duties and
quantitative restrictions on the import and export of energy goods and all
measures having equivalent effect shall be prohibited between the Parties. This
prohibition shall also apply to customs duties of a fiscal nature.

2.           Paragraph 1 shall not
preclude quantitative restrictions or measures having equivalent effect, justified
on grounds of public policy or public security; protection of human, animal or
plant life or health, or the protection of industrial and commercial property.
Such restrictions or measures shall not, however, constitute a means of
arbitrary discrimination or a disguised restriction on trade between the
Parties.

Article 272

Transit

The Parties shall take the necessary
measures to facilitate transit, consistent with the principle of freedom of
transit, and in accordance with Article V.2, V.4 and V.5 of GATT 1994 and
Articles 7.1 and 7.3 of the Energy Charter Treaty of 1994, which are
incorporated into and made part of this Agreement.

Article 273

Transport

As regards
transport of electricity and gas, and in particular third-party access to fixed
infrastructure, the Parties shall adapt their legislation, as referred to in
Annex XXVII to this Agreement and in the Energy Community Treaty of 2005, in
order to ensure that the tariffs, published prior to their entry into force,
the capacity allocation procedures and all other conditions are objective,
reasonable and transparent and shall not discriminate on the basis of origin,
ownership or destination of the electricity or gas.

Article 274

Cooperation on infrastructure

The Parties shall endeavour to facilitate
the use of gas transmission infrastructure and gas storage facilities and shall
consult or coordinate, as appropriate, with each other on infrastructure
developments. The Parties shall cooperate on matters related to trade in
natural gas, sustainability and security of supply.

With a view to further integrate markets of
energy goods, each Party shall take into account the energy networks and
capacities of the other Party when developing policy documents regarding demand
and supply scenarios, interconnections, energy strategies and infrastructure
development plans.

Article 275

Unauthorised taking of energy goods

Each Party
shall take all necessary measures to prohibit and address the unauthorised taking of energy goods
transited or transported through its area.

Article 276

Interruption

1.           Each Party shall ensure
that transmission system operators take the necessary measures to:

(a)     minimise the risk of accidental
interruption, reduction or stoppage of transit and transport;

(b)     expeditiously restore the normal operation
of such transit or transport, which has been accidentally interrupted, reduced
or stopped.

2.           A Party through whose
territory energy goods transit or are transported shall not, in the event of a
dispute over any matter involving the Parties or one or more entities subject
to the control or jurisdiction of one of the Parties, interrupt or reduce,
permit any entity subject to its control or jurisdiction, including a state
trading enterprise, to interrupt or reduce, or require any entity subject to its
jurisdiction to interrupt or reduce the existing transport or transit of energy
goods, except where this is specifically provided for in a contract or other
agreement governing such transit or transport, prior to the conclusion of a
dispute resolution procedure under the relevant contract.

3.           The Parties agree that a
Party shall not be held liable for an interruption or reduction pursuant to
this Article where that Party is in an impossibility to supply, transit or
transport energy goods as a result of actions attributable to a third country
or an entity under the control or jurisdiction of a third country.

Article 277

Regulatory
authority for electricity and gas

1.           A regulatory authority
shall be legally distinct and functionally independent from any public or
private entity, and sufficiently empowered to ensure effective competition and
the efficient functioning of the market.

2.           The decisions of and the
procedures used by a regulatory authority shall be impartial with respect to
all market participants.

3.           An operator affected by any
decision of a regulatory authority shall have the right to appeal against that
decision to an appeal body which is independent of the parties involved. Where
the appeal body is not judicial in character, written reasons for its decision
shall always be given and its decisions shall also be subject to review by an
impartial and independent judicial authority. Decisions taken by appeal bodies
shall be effectively enforced.

Article 278

Relationship with the Energy Community Treaty

1.           In the event of a conflict
between the provisions of this Section and the provisions of the Energy
Community Treaty of 2005 or the provisions of the EU legislation made
applicable under the Energy Community Treaty of 2005, the provisions of the Energy
Community Treaty of 2005 or the provisions of the relevant EU legislation made
applicable under the Energy Community Treaty of 2005 shall prevail to the
extent of such conflict.

2.           In implementing this
Section, preference shall be given to the adoption of legislation or other acts
which are consistent with the Energy Community Treaty of 2005 or are based on
the legislation applicable to this sector in the EU. In the event of a dispute
as regards this Section, legislation or other acts which meet these criteria
shall be presumed to conform to this Section. In assessing whether the
legislation or other acts meet these criteria, any relevant decision taken
under Article 91 of the Energy Community Treaty of 2005 shall be taken into
account.

3.           Neither Party shall
utilise the dispute settlement provisions of this Agreement in order to allege
a violation of the provisions of the Energy Community Treaty.

Article 279

Access
to and exercise of the activities of prospecting, exploring for and producing
hydrocarbons

1.           Each Party[44] has, in accordance with
international law including the United Nations Convention on the Law of the Sea
of 1982, full sovereignty over hydrocarbon resources located in its territory
as well as in its archipelagic and territorial waters in addition to sovereign
rights for the purposes of exploring and exploiting hydrocarbon resources
located in its exclusive economic zone and continental shelf.

2.           Each Party retains the
right to determine the areas within its territory as well as in its archipelagic
and territorial waters, exclusive economic zone and continental shelf to be
made available for the exercise of the activities of prospecting, exploring for
and producing hydrocarbons.

3.           Whenever an area is made
available for the exercise of these activities, each Party shall ensure that
entities, as regards access to and exercise of these activities, are treated on
an equal basis.

4.           Each Party may require an
entity, which has been granted an authorisation for the exercise of the
activities of prospecting, exploring for and producing hydrocarbons, to pay a
financial contribution or a contribution in hydrocarbons. The detailed
arrangements of such contribution shall be fixed in such a way so as not to
interfere in the management process and decision-making of entities.

Article 280

Licensing and licensing conditions

1.           Parties shall take the
necessary measures to ensure that licences, through which an entity is entitled
to exercise, on its own behalf and at its own risk, the right to prospect or
explore for or produce hydrocarbons in a geographical area, are granted
following a published procedure and invite potentially interested applicants to
submit applications by means of a notice.

2.           The notice shall specify
the type of licence, the relevant geographical area or part thereof and the
proposed date or time limit for granting a licence.

3.           As to the licensing
conditions and the licensing authorisation procedure Article 104 and Article
105 of this Agreement apply.

CHAPTER 12

TRANSPARENCY

Article 281

Definitions

For the purposes of this Chapter:

1.           "Measures of general
application" include laws, regulations, judicial decisions, procedures and
administrative rulings of general application and any other general or abstract
act, interpretation or other requirement that may have an impact on any matter
covered by this Agreement. It does not include a ruling that applies to a
particular person; and

2.           "Interested
person" means any natural or legal person that may be subject to any
rights or duties under measures of general application, within the meaning of Article 282 of this Agreement.

Article 282

Objective
and scope

1.           Cognisant of the impact
which their respective regulatory environment may have on trade between them,
the Parties shall establish and maintain an effective and predictable
regulatory environment for economic operators doing business in their
territory, especially small ones, due account being taken of the requirements
of legal certainty and proportionality.

2.           The Parties, reaffirming
their respective commitments under the WTO Agreement hereby lay down
clarifications and improved arrangements for transparency, consultation, and
better administration of measures of general application, insofar as these may
have an impact on any matter covered by this Agreement.

Article 283

Publication

1.           Each Party shall ensure
that measures of general application:

(a)     are promptly published or are
otherwise made readily available to interested persons, in a non-discriminatory
manner, via an officially designated medium, and where feasible and possible,
electronic means, in such manner as to enable interested persons and the other
Party to become acquainted with them;

(b)     provide an explanation of the
objective of and rationale for such measure; and

(c)     allow for sufficient time between
publication and entry into force of such measure except where this is not
possible because of an emergency.

2.           Each Party shall:

(a)     endeavour to publish in advance any
proposal to adopt or amend any measure of general application, including an
explanation of the objective of and rationale for the proposal;

(b)     provide reasonable opportunities for
interested persons to comment on such proposed measure, allowing, in
particular, for sufficient time for such opportunities; and

(c)     endeavour to take into account the
comments received from interested persons with respect to such proposed
measure.

Article 284

Enquiries
and contact points

1.           Each Party shall maintain
or establish appropriate mechanisms for responding to enquiries from any
interested person regarding any measures of general application which are
proposed or in force, and how they would be applied in general.

In particular, in order to facilitate
communication between the Parties on any matter covered by this Agreement, each
Party shall designate a contact point. Upon request of either Party, the
contact point shall indicate the office or official responsible for the matter
and shall provide the required support to facilitate communication with the
requesting Party.

Enquiries may be addressed through such
mechanisms established under this Agreement.

2.           The Parties recognise that
a response as provided for in paragraph 1 of this Article may not be definitive
or legally binding but will be for information purposes only, unless otherwise
provided in the internal law and regulations of the Parties.

3.           Upon request by the other
Party, a Party shall promptly provide information and respond to questions
pertaining to any actual or proposed measure of general application that the
requesting Party considers might affect the implementation of this Agreement,
regardless of whether the requesting Party has been previously notified of that
measure.

4.           Each Party shall maintain
or establish appropriate mechanisms for interested persons tasked with seeking
to effectively resolve problems for interested persons of the other Party that
may arise from the application of any measures of general application and
administrative proceedings as mentioned in Article 285 of this Agreement. Such
mechanisms should be easily accessible, time-bound, result-oriented, and
transparent. They shall be without prejudice to any appeal or review procedures
which Parties establish or maintain. They shall also be without prejudice to
the Parties’ rights and obligations under Chapter 14 (Dispute
Settlement) and Chapter 15 (Mediation) of Title IV of this Agreement.

Article 285

Administrative proceedings

Each Party shall administer in a
consistent, impartial, and reasonable manner all measures of general
application referred to in Article 281 of this Agreement. To this end, in
applying those measures to particular persons, goods, services or
establishments of the other Party in specific cases, each Party shall:

(a)          endeavour to provide interested
persons of the other Party, that are directly affected by a proceeding and in
accordance with the Party's procedures, with reasonable notice when a
proceeding is initiated, including a description of the nature of the
proceeding, a statement of the legal authority under which the proceeding is
initiated, and a general description of any issues in controversy;

(b)          afford such interested persons a
reasonable opportunity to present facts and arguments in support of their
positions prior to any final administrative action, when time, the nature of
the proceeding, and the public interest permit; and

(c)          ensure that its procedures are
based on, and in accordance with, its domestic law.

Article 286

Review
and appeal

1.           Each Party shall establish
or maintain courts or other independent tribunals, including, where relevant,
quasi-judicial or administrative tribunals, or procedures for the purpose of
the prompt review and, where warranted, correction of administrative action in
areas covered by this Agreement. Such courts, tribunals or procedures shall be
impartial and independent of the office or authority entrusted with
administrative enforcement and shall not have any substantial interest in the
outcome of the matter.

2.           Each Party shall ensure
that, in any such courts, tribunals or procedures, the parties to the
proceeding are provided with the right to:

(a)     a reasonable opportunity to support or
defend their respective positions; and

(b)     a decision based on the evidence and
submissions of record or, where required by the Party’s law, the record
compiled by the administrative authority.

3.           Subject to appeal or
further review as provided in its domestic law, each Party shall ensure, that
such decision shall be implemented by, and shall govern the practice of, the
office or authority competent with respect to the administrative action at
issue.

Article 287

Regulatory quality and performance and good administrative behaviour

1.           The Parties agree to
cooperate in promoting regulatory quality and performance, including through
exchange of information and best practices on their respective regulatory
reform processes and regulatory impact assessments.

2.           The Parties subscribe to
the principles of good administrative behaviour, and agree to cooperate in
promoting them, including through exchange of information and best practices.

Article 288

Non-discrimination

Each Party shall apply to interested
persons of the other Party transparency standards no less favourable than those
accorded to its own interested persons.

CHAPTER 13

Trade and
Sustainable Development

Article 289

Context and objectives

1.           The Parties recall Agenda
21 on Environment and Development of 1992, the Johannesburg Plan of
Implementation on Sustainable Development of 2002 and the
internationally agreed policy agendas in the employment and social policy
fields, notably the International Labour Organization (hereinafter referred to
as the "ILO") Decent Work Agenda and the 2006 Ministerial declaration
of the UN Economic and Social Council on Full Employment and Decent Work, the
Parties reaffirm their commitment to promoting the development of international
trade, in such a way as to contribute to the objective of sustainable
development and to ensuring that this objective is integrated and reflected at
every level of their trade relationship. To this end, the Parties recognise the
importance of taking fully into account the economic, social and environmental
best interests of not only their respective populations but also future
generations.

2.           To this end, the Parties
shall ensure that economic development, environmental and social policies are
mutually supportive.

Article 290

Right to regulate

1.           Recognising the right of
the Parties to establish and regulate their own levels of domestic
environmental and labour protection and sustainable development policies and
priorities, in line with relevant internationally recognised principles and
agreements, and to adopt or modify their legislation accordingly, the Parties
shall ensure that their legislation provides for high levels of environmental
and labour protection and shall strive to continue to improve that legislation.

2.           As a way to achieve the
objectives referred to in this Article, Ukraine shall approximate its laws,
regulations and administrative practice to the EU acquis.

Article 291

Multilateral labour standards and agreements

1.           The Parties recognise full
and productive employment and decent work for all as key elements for trade in
the context of globalisation. The Parties reaffirm their commitments to promote
the development of trade in a way that is conducive to full and productive
employment and decent work for all, including men, women and young people.

2.           The Parties shall promote and implement in their laws and practices the
internationally recognised core labour standards, namely:

(a)     the freedom of association and the
effective recognition of the right to collective bargaining;

(b)     elimination of all forms of forced or
compulsory labour;

(c)     effective abolition of child labour;
and

(d)     elimination of discrimination in
respect of employment and occupation.

3.           The Parties reaffirm their
commitment to effectively implement the fundamental and priority ILO
Conventions that they have ratified, and the ILO 1998 Declaration on
Fundamental Rights and Principles at Work. The Parties will also consider
ratification and implementation of other ILO Conventions that are classified as
up to date by the ILO.

4.           The Parties stress that
labour standards should not be used for protectionist trade purposes. The
Parties note that their comparative advantage should in no way be called into
question.

Article 292

Multilateral environmental agreements

1.           The Parties recognise the
value by international environmental governance and agreements as a response of
the international community to global or regional environmental problems.

2.           The Parties reaffirm their
commitment to the effective implementation in their laws and practices of the
multilateral environmental agreements to which they are party.

3.           Nothing in this Agreement
shall limit the rights of a Party to adopt or maintain measures to implement
the multilateral environmental agreements to which it is a Party. Such measures
shall not be applied in a manner which would constitute a means of arbitrary or
unjustifiable discrimination between the Parties or a disguised restriction on
trade.

4.           The Parties shall ensure
that environmental policy shall be based on the precautionary principle and on
the principles that preventive action should be taken, that environmental
damage should as a priority be rectified at source and that the polluter should
pay.

5.           The Parties shall
cooperate in order to promote the prudent and rational utilisation of natural
resources in accordance with the objective of sustainable development with a
view to strengthening the links between the Parties' trade and environmental
policies and practices.

Article 293

Trade favouring sustainable development

1.           The Parties reaffirm that
trade should promote sustainable development in all its dimensions. The Parties
recognise the beneficial role that core labour standards and decent work can
have on economic efficiency, innovation and productivity, and they highlight
the value of greater coherence between trade policies, on the one hand, and
employment and social policies on the other.

2.           The Parties shall strive
to facilitate and promote trade and foreign direct investment in environmental
goods, services and technologies, sustainable renewable-energy and
energy-efficient products and services, and eco-labelled goods, including
through addressing related non-tariff barriers.

3.           The Parties shall strive
to facilitate trade in products that contribute to sustainable development,
including products that are the subject of schemes such as fair and ethical
trade schemes, as well as those respecting corporate social responsibility and
accountability principles.

Article 294

Trade in forest products

In order to
promote the sustainable management of forest resources, Parties commit to work
together to improve forest law enforcement and governance and promote trade in
legal and sustainable forest products.

Article 295

Trade in fish products

Taking into
account the importance of ensuring responsible management of fish stocks in a
sustainable manner as well as promoting good governance in trade, the Parties
undertake to work together by:

(a)          taking effective measures to
monitor and control fish and other aquatic resources;

(b)          ensuring full
compliance with applicable conservation and control measures, adopted by
Regional Fisheries Management Organisations as well as cooperating with and
within Regional Fisheries Management Organisations as widely as possible; and

(c)          introducing inter alia trade
measures to combat illegal, unreported and unregulated fishing.

Article 296

Upholding levels of protection

1.           A Party shall not fail to
effectively enforce its environmental and labour laws, through a sustained or
recurring course of action or inaction, in a manner affecting trade or
investment between the Parties.

2.           A Party shall not weaken
or reduce the environmental or labour protections afforded by its laws to
encourage trade or investment, by waiving or otherwise derogating from, or
offering to waive or otherwise derogate from, its laws, regulations or
standards, in a manner affecting trade or investment between the Parties.

Article 297

Scientific information

The Parties recognise the importance, when
preparing, adopting and implementing measures aimed at protecting the
environment, public health and social conditions that affect trade between the
Parties, of taking account of scientific and technical information, and
relevant international standards, guidelines or recommendations.

Article 298

Review of sustainability impacts

The Parties
commit to reviewing, monitoring and assessing the impact of the implementation
of this Title on sustainable development through their respective participative
processes and institutions, as well as those set up under this Agreement, for
instance, through trade-related sustainability impact assessments.

Article 299

Civil
society institutions

1.           Each Party shall designate
and convene a new or existing Advisory Group on sustainable development with
the task of advising on the implementation of this Chapter.

2.           The Advisory Group
comprises independent representative organisations of civil society in a
balanced representation of employers and workers organisations,
non-governmental organisations as well as other relevant stakeholders.

3.           Members of the Advisory
Group of each Party will meet at an open Civil Society Forum in order to
conduct a dialogue encompassing sustainable development aspects of trade
relations between the Parties. The Civil Society Forum will meet once a year
unless otherwise agreed by the Parties. The Parties shall agree on the
operation of the Civil Society Forum no later than one year after the entry
into force of this Agreement.

4.           The dialogue undertaken by
the Civil Society Forum shall not prejudice the role of the Civil Society
Platform, established under Article 469 of this Agreement, to exchange views on
any issue concerning the implementation of this Agreement.

5.           The Parties shall inform
the Civil Society Forum on progress in implementation of this Chapter. The
views, opinions or suggestions of the Civil Society Forum can be submitted to
the Parties directly or through the Advisory Groups.

Article 300

Institutional and monitoring mechanisms

1.           The
Trade and Sustainable Development Sub-Committee is hereby established. It shall report on its activities to the
Association Committee in its configuration under Article 465(4) of this
Agreement. The Trade and Sustainable Development Sub-Committee
shall comprise senior officials from within the administrations of each Party. It
shall oversee the implementation of this Chapter, including the results of
monitoring activities and impact assessments and shall discuss in good faith
any problems arising from the application of this Chapter. It shall establish
its own rules of procedure. It shall meet within the first year after the date
this Agreement enters into force and thereafter at least once a year.

2.           Each Party shall designate
a contact point within its administration in order to facilitate communication
between the Parties on any matter covered by this Chapter.

3.           The Parties may monitor
the progress in implementing and enforcing measures covered by this Chapter. A
Party may request the other Party to provide specific and reasoned information
on the results of implementation of this Chapter.

4.           A Party may request
consultations with the other Party regarding any matter arising under this
Chapter, by delivering a written request to the contact point of that Party.
The Parties agree to consult promptly through appropriate channels at the
request of either Party.

5.           The Parties shall make
every attempt to arrive at a mutually satisfactory resolution of the matter and
may seek advice, information or assistance from any person or body they deem
appropriate in order to fully examine the matter at issue. The Parties shall take into account the activities of the ILO or
relevant multilateral environmental organisations or bodies to which they are
party.

6.           If the Parties fail to
resolve the matter through consultations, either Party may request that the Trade and Sustainable Development Sub-Committee
be convened to consider the matter by delivering a written request to the
contact point of the other Party. It shall convene promptly and endeavour to agree on a resolution of the
matter, including, where appropriate, by consulting
with governmental or non-governmental experts. The
resolution of the Trade and Sustainable Development Sub-Committee shall be made public unless it otherwise decides.

7.           For any matter arising
under this Chapter, the Parties shall only have recourse to the procedures
provided for in Articles 300 and 301 of this Agreement.

Article 301

Group
of Experts

1.           Unless the Parties
otherwise agree, a Party may, after 90 days of the delivery of a request for
consultations, under Article 300(4) of this Agreement, request that a Group of
Experts be convened to examine the matter that has not been satisfactorily
addressed through governmental consultations. Within 30 days after the request
by a Party to convene the Group of Experts, following the request of either
Party, the Trade and Sustainable Development Sub-Committee may be convened to
discuss the matter. The Parties may present submissions to the Group. The Group
may seek information and advice from either Party, the Advisory Group(s), or
international organisations. The Group of Experts shall
be convened within 60 days from the date of a Party's request.

2.           The
Group that is selected in accordance with the procedures set out in paragraph 3
of this Article, shall provide its expertise in implementing this Chapter.
Unless the Parties otherwise agree, the Group shall, within 90 days after the
last expert is selected, present to the Parties a report. The Parties shall
make their best efforts to accommodate advice or recommendations of the Group
on the implementation of this Chapter. The implementation of the recommendations
of the Group shall be monitored by the Trade and
Sustainable Development Sub-Committee.
The report of the Group shall be made available to the Advisory Group(s) of the
Parties. As regards confidential information and rules of procedure, the principles
in Annex XXIV to Chapter 14 (Dispute Settlement) of Title IV of this Agreement,
respectively, shall apply.

3.           Upon the entry into force of this
Agreement, the Parties shall agree on a list of at
least 15 persons with expertise on the issues covered
by this Chapter, of whom at least five shall be non-nationals of either Party who will serve as Chair
of the Group. The experts shall be independent of, and not be affiliated with or take
instructions from, either Party or organisations represented in the Advisory
Group(s). Each Party shall select one expert from the list of experts within 50 days following the date of receipt of a Party's request to establish the Group. If a Party fails to select its expert within such period, the other Party
shall select from the list of experts a national of the
Party that has failed to select an expert. The two selected
experts shall agree on the chair who shall be chosen from the list of
non-nationals experts.

Article 302

Cooperation on trade and sustainable development

The Parties will work
together on trade-related aspects of labour and environmental policies in order
to achieve the objectives of this Agreement.

CHAPTER 14[45]

DISPUTE SETTLEMENT

Article 303

Objective

The objective of this Chapter is to avoid
and settle, in good faith, any dispute between the Parties concerning the application of provisions of this Agreement referred
to in Article 304 of this Agreement and to arrive at a mutually agreed solution wherever possible.[46]

Article 304

Scope

The provisions of this Chapter apply in
respect to any dispute concerning the interpretation and application of the
provisions of Title IV of this Agreement except as otherwise expressly
provided.

Article 305

Consultations

1.           The Parties shall
endeavour to resolve any dispute regarding the interpretation and application
of the provisions of this
Agreement referred to in Article 304 of this Agreement by
entering into consultations in good faith with the aim of reaching a mutually
agreed solution.

2.           A Party shall seek consultations
by means of a written request to the other Party, copied to the Trade
Committee, identifying the measure at issue and the provisions of this
Agreement referred to in Article 304 of
this Agreement that it
considers applicable.

3.           Consultations shall be
held within 30 days of the date of the receipt of the request and shall take
place, unless the Parties agree otherwise, in the territory of the Party
complained against. The consultations shall be deemed concluded within 30 days
of the date of the receipt of the request, unless both Parties agree to
continue consultations. All confidential information disclosed during the
consultations shall remain confidential.

4.           Consultations on matters
of urgency, including those regarding perishable or seasonal goods shall be
held within 15 days of the date of the submission of the request, and shall be
deemed concluded 15 days after the date of the submission of the request.

5.           Where consultations
concern the transport of energy goods through networks and one Party views
resolution of the dispute as urgent because of an interruption, in full or in
part, of transport of natural gas, oil or electricity between Ukraine and the
EU Party they shall be held within three days of the date of the submission of
the request and shall be deemed concluded three days after the date of the
submission of the request unless both Parties agree to continue consultations.
All confidential information disclosed during the consultations shall remain
confidential.

6.           If consultations are not
held within the timeframes laid down in paragraph 3 of this Article or in paragraph 4 of
this Article respectively, or if consultations have been concluded and no
agreement has been reached on a mutually agreed solution, the complaining Party
may request the establishment of an arbitration panel in accordance with
Article 306 of this Agreement.

Section 1

Arbitration Procedure

Article 306

Initiation of the arbitration procedure

1.           Where
the Parties have failed to resolve the dispute by recourse to consultations as
provided for in Article 305 of this
Agreement, the complaining Party may request the
establishment of an arbitration panel.

2.           The request for the
establishment of an arbitration panel shall be made in writing to the Party
complained against and the Trade Committee. The complaining Party shall
identify in its request the specific measure at issue and provide a brief
summary of the legal basis of the complaint sufficient to present the problem
clearly. In case the complaining Party requests the establishment of a panel
with other than standard terms of reference, the written request shall include
the proposed text of special terms of reference.

3.           Unless
the Parties agree otherwise
within five days from the establishment of the panel the terms of reference of
the arbitration panel shall be:

“to examine the matter referred to in the
request for establishment of the arbitration panel, to rule on the
compatibility of the measure in question with the provisions of this Agreement referred to in Article 304
of this Agreement and to make a ruling in accordance with
Article 310 of this Agreement.”

Article 307

Composition of the arbitration panel

1.           An
arbitration panel shall be composed of three arbitrators.

2.           Within 10 days of the date
of the submission of the request for the establishment of an arbitration panel
to the Trade Committee, the Parties shall consult in order to reach an
agreement on the composition of the arbitration panel.

3.           In the event that the
Parties are unable to agree on the composition of the arbitration panel within
the time frame laid down in paragraph 2 of this Article, either Party may
request the chair of the Trade Committee, or the chair's delegate, to select
all three members by lot from the applicable list established under Article 323
of this Agreement, one among the individuals proposed by the complaining Party,
one among the individuals proposed by the Party complained against and one
among the individuals selected by the Parties to act as chairperson.

4.           Where the Parties agree on
one or more of the members of the arbitration panel, any remaining member or
members shall be selected by the same procedure:

(a)     if the Parties have agreed on two
members of the arbitration panel, the remaining member shall be selected from
the individuals selected by the Parties to act as chairperson;

(b)     if the Parties have agreed on one
member of the arbitration panel, one of the remaining members shall be selected
from the individuals proposed by the complaining Party and one from the individuals
proposed by the Party complained against.

5.           The chair of the Trade Committee, or the chair's delegate, shall
select the arbitrators within five days of the request referred to in paragraph
3. A representative of each Party is entitled to be present at the selection.

6.           The date of establishment
of the arbitration panel shall be the date on which the selection procedure is
completed.

7.           Should any of the lists
provided for in Article 323 of this Agreement not be established at the time a
request is made pursuant to paragraph 3 of this Article the three
arbitrators shall be drawn by lot from the individuals which have been formally
proposed by one or both of the Parties.

8.           In respect of a dispute
concerning Chapter 11 (Trade-related Energy) of Title IV of this Agreement which
one Party considers to be urgent because of an interruption, in full or in
part, of any transport of natural gas, oil, or electricity or a threat thereof,
between Ukraine and the EU Party paragraph 3 of this Article shall apply without
recourse to paragraph 2 of this
Article, and the period in paragraph 5 of this Article shall be
two days.

Article 308

Interim Panel Report

1.           The arbitration panel
shall issue to the Parties an interim report setting out the findings of facts,
the applicability of the relevant provisions and the basic rationale behind any
findings and recommendations that it makes, within 90 days of the date of
establishment of the arbitration panel. Where it considers that this deadline
cannot be met, the chairperson of the arbitration panel must notify the Parties
and the Trade Committee in writing, stating the reasons for the delay and the
date on which the panel plans to issue its interim report. Under no
circumstances should the interim report be issued later than 120 days after the
date of the establishment of the arbitration panel.

2.           Any Party may submit a
written request for the arbitration panel to review precise aspects of the
interim report within 14 days of its issuance.

3.           In cases of urgency,
including those involving perishable or seasonal goods, the arbitration panel
shall make every effort to issue its interim report and any Party may submit a
written request for the arbitration panel to review precise aspects of the
interim report, within half of the respective time frames under paragraphs 1
and 2 of this Article.

4.           In respect of a dispute
concerning Chapter 11 (Trade-related Energy) of Title IV of this Agreement
which one Party considers to be urgent because of an interruption, in full or
in part, of any transport of natural gas, oil or electricity, or a threat
thereof, between Ukraine and the EU Party, the interim report shall be issued
after 20 days and any request pursuant to paragraph 2 shall be made within five
days of issuance of the written report. The arbitration panel may also decide
to dispense with the interim report.

5.           After considering any
written comments by the Parties on the interim report, the arbitration panel
may modify its report and make any further examination it considers appropriate.
The final arbitration panel ruling shall include a discussion of the arguments
made at the interim review stage.

Article 309

Conciliation for urgent energy disputes

1.           In respect of a dispute
concerning Chapter 11 (Trade-related Energy) of Title IV of this Agreement
which one Party considers to be urgent because of an interruption, in full or
in part, of any transport of natural gas, oil, or electricity or a threat
thereof, between Ukraine and the EU Party, either Party may request the chair
of the panel to act as conciliator concerning any matter related to the dispute
by making a request to the panel.

2.           The conciliator shall seek
an agreed resolution of the dispute or seek to agree a procedure to achieve
such resolution. If within 15 days of his appointment he has failed to secure
such agreement, he shall recommend a resolution to the dispute or a procedure
to achieve such resolution and shall decide on the terms and conditions to be
observed from a date which he shall specify until the dispute is resolved.

3.           The Parties and the
entities under their control or jurisdiction shall respect recommendations made
under paragraph 2 of this Article on the terms and conditions for three months following the
conciliator’s decision or until resolution of the dispute, whichever is
earlier.

4.           The conciliator shall
respect the Code of Conduct for Arbitrators.

Article 310

Arbitration panel ruling

1.           The
arbitration panel shall notify its ruling to the Parties and to the Trade
Committee within 120 days from the date of the establishment of the arbitration
panel. Where the arbitration panel considers that it cannot meet this deadline,
the chairperson of the arbitration panel shall notify the Parties and the Trade
Committee in writing, stating the reasons for the delay and the date on which
the panel plans to conclude its work. Under no circumstances should the ruling
be notified later than 150 days from the date of the establishment of the
arbitration panel.

2.           In cases of urgency,
including those involving perishable or seasonal goods, the arbitration panel
shall make every effort to notify its ruling within 60 days from the date of
its establishment. Under no circumstances should it take longer than 75 days
from its establishment. The arbitration panel may give a preliminary ruling
within 10 days of its establishment on whether it deems the case to be urgent.

3.           In respect of a dispute
concerning Chapter 11 (Trade-related Energy) of Title IV of this Agreement which
one Party considers to be urgent because of an interruption, in full or in
part, of any transport of natural gas, oil or electricity or a threat thereof,
between Ukraine and the EU Party, the arbitration panel shall notify its ruling
within 40 days.

Section 2

Compliance

Article 311

Compliance with the arbitration panel ruling

Each Party shall take any measure necessary
to comply in good faith with the arbitration panel ruling, and the Parties will
endeavour to agree on the period of time to comply with the ruling.

Article 312

Reasonable period of time for compliance

1.           No
later than 30 days after the notification of the arbitration panel ruling to
the Parties, the Party complained against shall notify the complaining Party
and the Trade Committee of the time it considers it will require for compliance
(hereinafter referred to as the "reasonable period of time").

2.           If there is disagreement
between the Parties on the reasonable period of time to comply with the
arbitration panel ruling, the complaining Party shall, within 20 days of the
notification under paragraph 1 of
this Article, request in writing the original
arbitration panel to determine the length of the reasonable period of time.
Such request shall be notified simultaneously to the other party and to the
Trade Committee. The arbitration panel shall notify its ruling to the Parties
and to the Trade Committee within 20 days from the date of the submission of
the request.

3.           In the event of the
original arbitration panel, or some of its members, being unable to reconvene,
the procedures set out in Article 307 of this Agreement shall apply. The time
limit for notifying the ruling shall be 35 days from the date of the submission
of the request referred to in paragraph 2 of this Article.

4.           The
Party complained against will inform the complaining Party in writing of its
progress to comply with the arbitration panel ruling at least one month before
the expiry of the reasonable period of time.

5.           The reasonable period of time may be extended by mutual agreement of
the Parties.

Article 313

Review
of any measure taken to comply with the arbitration panel ruling

1.           The Party complained
against shall notify the complaining Party and the Trade Committee before the
end of the reasonable period of time of any measure that it has taken to comply
with the arbitration panel ruling.

2.           In the event that there is
disagreement between the Parties concerning the existence or the consistency of
any measure notified under paragraph 1 with the Agreement, the complaining
Party may request in writing the original arbitration panel to rule on the
matter. Such a request shall identify the specific measure at issue and the
provisions of the Agreement with which it considers that measure to be
inconsistent, in a manner sufficient to present the legal basis for the
complaint clearly. The arbitration panel shall notify its ruling within 45 days
of the date of the submission of the request.

3.           In the event of the
original arbitration panel, or some of its members, being unable to reconvene,
the procedures set out in Article 307
of this Agreement shall apply. The time limit for
notifying the ruling shall be 60 days from the date of the submission of the
request referred to in paragraph 2 of
this Article.

Article 314

Remedies for urgent energy disputes

1.           In respect of a dispute
concerning Chapter 11 (Trade-related Energy) of Title IV of this Agreement
which one Party considers to be urgent because of an interruption, in full or
in part, of any transport of natural gas, oil, or electricity or a threat
thereof, between Ukraine and the EU Party the following specific provisions on
remedies shall apply.

2.           By way of derogation from
Articles 311, 312 and 313 of this Agreement, the complaining Party may suspend
obligations arising under this Agreement to a level equivalent to the
nullification or impairment caused by a Party failing to bring itself into
compliance with the Panel's findings within 15 days of their release. This
suspension may take effect immediately. Such suspension may be maintained for
no longer than three months, unless the Party complained against has not
complied with the panel's report.

3.           Should the Party
complained against dispute the existence of a failure to comply or the level of
suspension due to the failure to comply, it may initiate proceedings under
Articles 315 or 316 of this Agreement which shall be examined on an expeditious
basis. The complaining party shall be required to remove or adjust the
suspension only once the Panel has ruled on the matter, and may maintain the
suspension pending the proceedings.

Article 315

Temporary
remedies in case of non-compliance

1.           If the Party complained
against fails to notify any measure taken to comply with the arbitration panel
ruling before the expiry of the reasonable period of time, or if the
arbitration panel rules that any measure notified under Article 313(1) of this
Agreement is inconsistent with that Party’s obligations under the provisions of
the Agreement referred to in Article 304, the Party complained against shall,
if so requested by the complaining Party, present an offer for temporary
compensation.

2.           If no agreement on
compensation is reached within 30 days of the end of the reasonable period of
time or of the arbitration panel ruling under Article 313 of this Agreement
that a measure taken to comply is inconsistent with the provisions of this
Agreement referred to in Article 304, the complaining Party shall be entitled,
upon notification to the Party complained against and to the Trade Committee,
to suspend obligations arising from any provision contained in the Chapter on
the free-trade area at a level equivalent to the nullification or impairment
caused by the violation. The complaining Party may implement the suspension at
any moment after the expiry of 10 days after the date of the notification,
unless the Party complained against has requested arbitration under paragraph 4 of this Article.

3.           In suspending obligations,
the complaining Party may choose to increase its tariff rates to the level
applied to other WTO Members on
a volume of trade to be determined in such a way that the volume of trade
multiplied by the increase of the tariff rates equals the value of the
nullification or impairment caused by the violation.

4.           If the Party complained
against considers that the level of suspension is not equivalent to the
nullification or impairment caused by the violation, it may request in writing
the original arbitration panel to rule on the matter. Such request shall be
notified to the complaining Party and to the Trade Committee before the expiry
of the 10 day period referred to in paragraph 2 of this Article. The arbitration
panel shall notify its ruling on the level of the suspension of obligations to
the Parties and to the Trade Committee within 30 days of the date of the
submission of the request. Obligations shall not be suspended until the
arbitration panel has notified its ruling, and any suspension shall be
consistent with the arbitration panel ruling.

5.           In the event of the
original arbitration panel, or some of its members, being unable to reconvene,
the procedures laid down in Article 307 of this Agreement shall apply. In such
cases, the period for notifying the ruling shall be 45 days from the date of
the submission of the request referred to in paragraph 4 of this Article.

6.           The suspension of
obligations shall be temporary and shall be applied only until any measure
found to be inconsistent with the provisions of the Agreement referred to in
Article 304 has been withdrawn or amended, so as to achieve conformity with the
provisions of the Agreement referred to in Article 304, as established under
Article 316, or until the Parties have agreed to settle the dispute.

Article 316

Review
of any measure taken to comply after the suspension of obligations

1.           The Party complained
against shall notify the complaining Party and the Trade Committee of any
measure it has taken to comply with the ruling of the arbitration panel and of
its request for an end to the suspension of obligations applied by the
complaining Party.

2.           If the Parties do not
reach an agreement on whether the notified measure brings the Party complained
against into conformity with the provisions of the Agreement referred to in
Article 304 of this Agreement within 30 days of the date of the submission of
the notification, the complaining Party may request in writing the original
arbitration panel to rule on the matter. Such request shall be notified
simultaneously to the Party complained against and to the Trade Committee. The
arbitration panel ruling shall be notified to the Parties and to the Trade Committee
within 45 days of the date of the submission of the request. If the arbitration
panel rules that the Party complained against has brought itself into
conformity with the Agreement, or if the complaining Party does not, within 45
days of the submission of the notification referred to in paragraph 1 of this Article,
request that the original arbitration panel rule on the matter, the suspension
of obligations shall be terminated within 15 days of either the ruling of the
arbitration panel or the end of the 45 day period.

3.           In the event of the
original arbitration panel, or some of its members, being unable to reconvene,
the procedures laid down in Article 307 of this Agreement shall apply. The
period for notifying the ruling shall in that case be 60 days from the date of
the submission of the request referred to in paragraph 2 of this Article.

Section 3

Common Provisions

Article 317

Mutually
agreed solution

The Parties may reach a mutually agreed
solution to a dispute under this Chapter at any time. They shall jointly notify
the Trade Committee and the chairperson of the arbitration panel, where
applicable, of any such solution. If the solution requires approval pursuant to
the relevant domestic procedures of either party, the notification shall refer
to this requirement, and the arbitration procedure shall be suspended. If such
approval is not required, or upon notification of the completion of any such
domestic procedures, the arbitration procedure shall be terminated.

Article 318

Rules
of procedure

1.           Dispute settlement
procedures under this Chapter shall be governed by the Rules of Procedure set
out in Annex XXIV to this Agreement.

2.           Any hearing of the
arbitration panel shall be open to the public in accordance with the Rules of
Procedure set out in Annex XXIV to this Agreement.

Article 319

Information
and technical advice

At the
request of a Party, or upon its own initiative, the arbitration panel may
obtain information from any source, including the Parties involved in the
dispute, it deems appropriate for the arbitration panel proceeding. The
arbitration panel also has the right to seek the relevant opinion of experts as
it deems appropriate. Any information obtained in this manner must be disclosed
to each of the Parties and submitted for their comments. Interested natural or
legal persons established in the Parties' territories are authorised to submit amicus
curiae briefs to the arbitration panel in accordance with the Rules of
Procedure set out in Annex XXIV to this Agreement.

Article 320

Rules
of interpretation

Any arbitration panel shall interpret the
provisions referred to in Article 304 of this Agreement in accordance with
customary rules of interpretation of public international law, including those
codified in the Vienna Convention on the Law of Treaties of 1969. Where an obligation under this Agreement is identical to an
obligation under the WTO Agreement, the arbitration panel shall adopt an
interpretation which is consistent with any relevant interpretation established
in rulings of the WTO Dispute Settlement Body (hereinafter referred to as
"DSB"). The rulings of the arbitration panel
cannot add to or diminish the rights and obligations provided for in this
Agreement.

Article 321

Arbitration
panel decisions and rulings

1.           The
arbitration panel shall make every effort to take any decision by consensus.
Where, nevertheless, a decision cannot be arrived at by consensus, the matter
at issue shall be decided by majority vote. However, in no case dissenting
opinions of arbitrators shall be published.

2.           Any ruling of the
arbitration panel shall be binding on the Parties and shall not create any
rights or obligations for natural or legal persons. The ruling shall set out
the findings of fact, the applicability of the relevant provisions of the Agreement
and the basic rationale behind any findings and conclusions that it makes. The
Trade Committee shall make the arbitration panel rulings publicly available in
their entirety unless it decides not to do so.

Article 322

Dispute
settlement relating to regulatory approximation

1.           The
procedures set out in this Article shall apply to disputes concerning the
interpretation and application of a provision of this Agreement relating to
regulatory approximation contained in Chapter 3 (Technical Barriers to Trade),
Chapter 4 (Sanitary and Phytosanitary Measures), Chapter 5 (Customs and Trade
Facilitation), Chapter 6 (Establishment, Trade in Services and Electronic
Commerce), Chapter 8 (Public Procurement) or Chapter 10 (Competition), or which
otherwise imposes upon a Party an obligation defined by reference to a
provision of EU law.

2.           Where a dispute raises a
question of interpretation of a provision of EU law referred to in paragraph 1,
the arbitration panel shall not decide the question, but request the Court of
Justice of the European Union to give a ruling on the question. In such cases,
the deadlines applying to the rulings of the arbitration panel shall be
suspended until the Court of Justice of the European Union has given its
ruling. The ruling of the Court of Justice of the European Union shall be
binding on the arbitration panel.

Section 4

General
Provisions

Article 323

Arbitrators

1.           The
Trade Committee shall, no later than six months after the entry into force of
this Agreement, establish a list of 15 individuals each who are willing and
able to serve as arbitrators. Each of the Parties shall propose five
individuals to serve as arbitrators. The two Parties shall also select five
individuals that are not nationals of either Party and who shall act as chairperson
to the arbitration panel. The Trade Committee shall ensure that the list is
always maintained at this level.

2.           The list established
pursuant to paragraph 1 of this
Article shall serve for the composition of arbitration
panels in accordance with Article 307 of this Agreement. It shall comprise
arbitrators with specialised knowledge or experience of law and international
trade.

3.           All arbitrators appointed
to serve on an arbitration panel shall be independent, serve in their
individual capacity and not take instructions from any organisation or
government, or be affiliated with the government of any of the Parties, and
shall comply with the Code of Conduct set out in Annex XXV to this Agreement.

Article 324

Relation
with WTO obligations

1.           Recourse to the
dispute settlement provisions of this Chapter shall be without prejudice to any
action in the WTO framework, including dispute settlement action.

2.           However, where a
Party has, with regard to a particular measure, instituted a dispute settlement
proceeding, either under Article 306(1) of this Agreement or under the WTO
Agreement, it may not institute a dispute settlement proceeding regarding the
same measure in the other forum until the first proceeding has been concluded. In addition, a Party shall not seek redress of an
obligation which is identical under this Agreement and under the WTO Agreement
in the two forums. In such case, once a dispute settlement proceeding has been
initiated, the Party shall not bring a claim seeking redress of the identical
obligation under the other Agreement to the other forum, unless the forum
selected fails for procedural or jurisdictional reasons to make findings on the
claim seeking redress of that obligation.

3.           For the purposes of paragraph 2:

(a)     dispute settlement proceedings
under the WTO Agreement are deemed to be initiated by a Party’s request for the
establishment of a panel under Article 6 of the Understanding on Rules and
Procedures Governing the Settlement of Disputes contained
in Annex 2 of the WTO Agreement (hereinafter referred to as the “DSU”) and are
deemed to be concluded when the DSB adopts the Panel’s report, and the
Appellate Body’s report as the case may be, under Articles 16 and 17.14 of the
DSU; and

(b)     dispute settlement proceedings
under this Chapter are deemed to be initiated by a Party’s request for the
establishment of an arbitration panel under Article 306(1) of this Agreement
and are deemed to be concluded when the arbitration panel issues its ruling to
the Parties and to the Trade Committee.

4.           Nothing in this Chapter
shall preclude a Party from implementing the suspension of obligations
authorised by the DSB. The WTO Agreement shall not be invoked to preclude a
Party from suspending obligations under this Chapter.

Article 325

Time
limits

1.           All time limits laid down
in this Chapter, including the limits for the arbitration panels to notify
their rulings, shall be counted in calendar days, the first day being the day
following the act or fact to which they refer.

2.           Any time limit referred to
in this Chapter may be extended by mutual agreement of the Parties.

Article 326

Modification
of the Chapter

The Trade Committee may decide to modify
this Chapter, the Rules of Procedure for Arbitration set out in Annex XXIV to
this Agreement and the Code of Conduct for Members of Arbitration Panels and
Mediators set out in Annex XXV to this Agreement.

CHAPTER 15

MEDIATION
MECHANISM

Article 327

Objective
and scope

1.           The objective of this
Chapter is to facilitate the finding of a mutually agreed solution through a
comprehensive and expeditious procedure with the assistance of a mediator.

2.           This Chapter shall apply
to any measure falling under the scope of Chapter 1 of Title IV of this
Agreement (National Treatment and Market Access for Goods) adversely affecting
trade between the Parties.

3.           This Chapter shall not
apply to measures falling under Chapter 6 (Establishment, Trade in Services and
Electronic Commerce), Chapter 7 (Current Payments and Movement of Capital),
Chapter 8 (Public Procurement), Chapter 9 (Intellectual Property) and Chapter
13 (Trade and Sustainable Development) of this Agreement. The Trade Committee
may, after due consideration, decide that this mechanism should apply to any of
these sectors.

Section
1

Procedure
under the Mediation Mechanism

Article 328

Request
for Information

1.           Before the initiation of
the mediation procedure, a Party may request at any time information regarding
a measure adversely affecting trade or investment between the Parties. The
Party to which such request is made shall provide, within 20 days, a response
containing its comments on the information contained in the request. Wherever
possible, the request and the response shall be made in writing.

2.           Where the responding Party
considers that a response within 20 days is not practicable, it shall inform
the requesting Party of the reasons for the delay, together with an estimate of
the shortest period within which it will be able to provide its response.

Article 329

Initiation
of the procedure

1.           A Party may request, at
any time, that the Parties enter into a mediation procedure. Such request shall
be addressed to the other Party in writing. The request shall be sufficiently
detailed to present clearly the concerns of the requesting Party and shall:

(a)     identify the specific measure at
issue;

(b)     provide a statement of the alleged
adverse effects that the requesting Party believes the measure has, or will
have, on trade or investment between the Parties; and

(c)     explain how the requesting Party
considers that those effects are linked to the measure.

2.           The Party to which such
request is addressed shall give sympathetic consideration to the request and
accept or reject it in writing within 10 days of its receipt.

Article 330

Selection
of the mediator

1.           Upon launch of the
mediation procedure, the Parties shall endeavour to agree on a mediator no
later than 15 days after the receipt of the reply to the request.

2.           If the Parties cannot
agree on the mediator within the established time frame, either Party may request
the chair of the Trade Committee, or the chair's delegate, to draw the mediator
by lot from the list established under Article 323 of this Agreement.
Representatives of both Parties to the dispute shall be invited with due
anticipation, to be present when lots are drawn. In any event, the lot shall be
carried out with the Party/Parties that are present

3.           The chair of the Trade Committee,
or the chair's delegate, shall select the mediator within five working days of
the request by either Party as referred to in paragraph 2.

4.           Should the list provided
for in Article 323 of this
Agreement not be established at the time a request is
made pursuant to paragraph 2 of
this Article the mediator shall be drawn by lot from
the individuals which have been formally proposed by one or both of the
Parties.

5.           The Parties may agree that
the mediator shall be a national of one of the Parties.

6.           The mediator shall assist,
in an impartial and transparent manner, the Parties in bringing clarity to the
measure and its possible trade effects, and in reaching a mutually agreed
solution. The code of conduct set out in Annex XXV to this Agreement shall
apply to mediators as provided for in that code. Rules 3 to 7 (notifications)
and 43 to 48 (translation and calculation of time limits) of the Rules of
Procedure set out in Annex XXIV to this Agreement shall also apply, mutatis
mutandis.

Article 331

Rules
of the mediation procedure

1.           Within 10 days after the
appointment of the mediator, the Party having invoked the mediation procedure
shall present, in writing, a detailed description of the problem to the
mediator and to the other Party, in particular of the operation of the measure
at issue and its trade effects. Within 20 days after
the date of delivery of this submission, the other Party may provide, in
writing, its comments to the description of the problem. Either Party may
include in its description or comments any information that it deems relevant.

2.           The mediator may decide on
the most appropriate way of bringing clarity to the measure concerned and its
possible trade-related impact. In particular, the mediator may organise
meetings between the Parties, consult the Parties jointly or individually, seek
the assistance of or consult with relevant experts and stakeholders, and
provide any additional support requested by the Parties. However, before
seeking the assistance of or consulting with relevant experts and stakeholders,
the mediator shall consult with the Parties.

3.           The mediator may offer advice
and propose a solution for consideration by the Parties which may accept or
reject the proposed solution or may agree on a different solution. However, the
mediator shall not advise or give comments on the consistency of the measure at
issue with this Agreement.

4.           The procedure shall take
place in the territory of the Party to which the request was addressed or by
mutual agreement in any other location or by any other means.

5.           The Parties shall
endeavour to reach a mutually agreed solution within 60 days from the appointment
of the mediator. Pending a final agreement, the Parties may consider possible
interim solutions, especially if the measure relates to perishable goods.

6.           The solution may be
adopted by means of a decision of the Trade Committee. Either Party may make such solution subject to the completion of
any necessary internal procedures. Mutually agreed solutions shall be made
publicly available. However, the version disclosed to the public may not
contain any information that a Party has designated as confidential.

7.           The procedure shall be terminated:

(a)     by the adoption
of a mutually agreed solution by the Parties, on the
date of adoption.

(b)     by a written declaration of the
mediator, after consultation with the Parties, that further efforts at
mediation would be to no avail;

(c)     by a written declaration of a Party
after exploring mutually agreed solutions under the mediation procedure and
after having considered any advice and proposed solutions by the mediator; or

(d)     at any stage of the procedure by
mutual agreement of the Parties.

Section
2

Implementation

Article 332

Implementation
of a mutually agreed solution

1.           Where the Parties have agreed to a solution, each Party shall take
the measures necessary to implement the mutually agreed solution within the agreed
timeframe.

2.           The implementing Party
shall inform the other Party in writing of any steps or measures taken to
implement the mutually agreed solution.

3.           On request of the Parties,
the mediator shall issue to the Parties, in writing, a draft factual report, providing a brief summary of:

(a)     the measure at issue in these
procedures;

(b)     the procedures followed; and

(c)     any mutually agreed solution reached
as the final outcome of these procedures, including possible interim solutions.

The mediator shall provide the parties 15 days
to comment on the draft report. After considering the comments of
the parties submitted within the period, the mediator shall submit, in writing,
a final factual report to the parties within 15 days. The factual report shall
not include any interpretation of this Agreement.

Section
3

General
Provisions

Article 333

Relationship
to dispute settlement

1.           The procedure under this
mediation mechanism is not intended to serve as a basis for dispute settlement
procedures under this Agreement or another agreement. A Party shall not rely on
or introduce as evidence in such dispute settlement procedures, nor shall a
panel take into consideration:

(a)     positions taken by the other Party in
the course of the mediation procedure;

(b)     the fact that the other Party has
indicated its willingness to accept a solution to the measure subject to
mediation; or

(c)     advice given or proposals made by the
mediator.

2.           The mediation mechanism is
without prejudice to the Parties’ rights and obligations under the provisions on Dispute Settlement.

3.           Unless
the Parties agree
otherwise, and without prejudice to Article 331(6) of this Agreement, all steps
of the procedure, including any advice or proposed solution, are confidential.
However, any Party may disclose to the public that mediation is taking place.

Article 334

Time
limits

Any time limit referred to in this Chapter
may be modified by mutual agreement between the Parties involved in these
procedures.

Article 335

Costs

1.           Each Party shall bear its
own expenses derived from the participation in the mediation procedure.

2.           The
Parties shall share jointly and equally the expenses derived from organisational matters, including the remuneration and expenses of the mediator,
any assistant to the mediator and, in the event that the Parties are unable to
agree on a common language, any costs associated with translation. Remuneration
of the mediator shall be in accordance with that foreseen for the Chairperson
of an arbitration Panel in paragraph 8 of Annex XXIV to this Agreement.

Article 336

Review

Five years after
the date of entry into force of this Agreement, the
Parties shall consult each other on the need to modify the mediation mechanism
in light of the experience gained and the development of a corresponding
mechanism in the WTO.

TITLE V

ECONOMIC AND SECTOR COOPERATION

TITLE V

ECONOMIC AND SECTOR COOPERATION

CHAPTER
1

ENERGY
COOPERATION, INCLUDING NUCLEAR ISSUES

Article 337

1.           The Parties agree to
continue and intensify their current cooperation on energy matters for the
enhancement of energy security, competitiveness and sustainability, which is
crucial for the promotion of economic growth and to making progress towards
market integration, including through gradual approximation in the energy
sector and through participation in regional energy cooperation. The regulatory
cooperation shall take into account the need to ensure relevant public service
obligations, including measures to inform and protect customers from unfair
selling practices, and access to affordable energy for consumers, including for
the most vulnerable citizens.

2.           Such cooperation shall be
based on a comprehensive partnership and shall be guided by the principles of
mutual interest, reciprocity, transparency and predictability, consistent with
the market economy, the Energy Charter Treaty of 1994, the Memorandum of
Understanding on cooperation in the field of energy and other multilateral and
related bilateral agreements.

Article 338

Mutual cooperation shall cover, among others,
the following areas:

(a)
implementation of energy strategies and policies
and development/elaboration of forecasts and scenarios, as well as improvement
of the statistical recording system in the energy sector based on timely
exchange of information on energy balances and energy flows, in accordance with
international practices, as well as infrastructure developments;

(b)
establishing effective mechanisms to address
potential energy crisis situations in a spirit of solidarity;

(c)
modernisation and enhancement of existing energy
infrastructures of common interests, including energy-generating capacities and
the integrity, safety and security of the energy networks, and progressive
integration of the Ukrainian electricity network into the European electricity
network, as well as full rehabilitation of the energy transit infrastructure
and the installation of cross-border metering systems on Ukraine's external
borders, and the establishment of new energy infrastructures of common interest
in order to diversify energy sources, suppliers, transportation routes and
transport methods in an economic and environmentally sound manner;

(d)
development of competitive, transparent and
non-discriminatory energy markets in convergence with EU rules and standards
through regulatory reforms;

(e)
cooperation in the framework of the Treaty
Establishing the Energy Community of 2005;

(f)
enhancement and strengthening of long-term
stability and security of energy trade, transit, exploration, extraction,
refining, production, storage, transport, transmission, distribution and
marketing, or sale of energy materials and products on a mutually beneficial
and non-discriminatory basis, in accordance with international rules, in
particular the Energy Charter Treaty of 1994, the WTO Agreement and this Agreement;

(g)
progress towards an attractive and stable
investment climate by addressing institutional, legal, fiscal and other
conditions, and encouraging mutual investments in the energy field on a
non-discriminatory basis;

(h)
efficient cooperation with the European
Investment Bank (EIB), The European Bank for Reconstruction and Development
(EBRD) and other international financial organisations and instruments to
support energy cooperation between the Parties;

(i)
promotion of energy efficiency and energy
savings, including through the establishment of energy efficiency policies and
legal and regulatory frameworks, with the aim of achieving major improvements
corresponding to EU standards, including efficient generation, production,
transportation, distribution and use of energy, compatible with the functioning
of market mechanisms, as well as the efficient utilisation of energy in
appliances, lightings and buildings;

(j)
development of and support for renewable
energies in an economic and environmentally sound manner, as well as
alternative fuels, including sustainable biofuel production, and cooperation on
regulatory issues, certification and standardisation as well as on
technological and commercial development;

(k)
promotion of the Joint Implementation Mechanism
under the Kyoto Protocol to the UN Framework Convention on Climate Change of
1997 to reduce emissions of greenhouse gases through energy efficiency and
renewable energy projects;

(l)
scientific and technical cooperation and
exchange of information for the development and improvement of technologies in
energy production, transportation, supply and end use, paying particular
attention to energy-efficient and environmentally friendly technologies,
including carbon capture and storage and efficient and clean coal technologies,
in accordance with established principles as set out, inter alia, in the
Agreement on Cooperation in Science and Technology between the European
Community and Ukraine;

(m)
cooperation in the framework of European and
international standardisation bodies in the field of energy.

Article 339

The Parties shall exchange information and
experience, as well as provide relevant support to the process of regulatory
reforms, which include the restructuring of the coal sector (steam coal, coking
coal and lignite) in order to increase its competitiveness, enhance mine safety
and occupational safety and reduce its environmental impact, while bearing in
mind the regional and social impact. In order to enhance efficiency,
competitiveness, and sustainability, the restructuring process needs to cover
the entire coal value chain, i.e. from exploration via production and processing
to conversion and handling of residues from coal processing and combustion.
This approach includes recovery and utilisation of methane emissions from coal
mines, as well as those from oil and gas operations, landfills, and the
agricultural sector, as set out, inter alia, by the Global Methane Initiative in
which the Parties are Partners.

Article 340

The Parties hereby establish an Early
Warning Mechanism as set out in Annex XXVI to Chapter 1 (Energy Cooperation,
including Nuclear Issues) of Title V (Economic and Sector Co-operation) of this
Agreement.

Article 341

Gradual approximation shall proceed in
accordance with a timetable, as set out in Annex XXVII to this Agreement.

Article 342

1.           Cooperation in the civil
nuclear sector shall take place through the implementation of specific
agreements in this field concluded or to be concluded between the Parties,
according to the respective powers and competences of the EU and its Members
States, or the European Atomic Energy Community (EURATOM) and its Member States
and in accordance with the legal procedures of each Party.

2.           Such cooperation shall
ensure a high level of nuclear safety, the clean and peaceful use of nuclear
energy, covering all civil nuclear energy activities and stages of the fuel
cycle, including production of and trade in nuclear materials, safety and
security aspects of nuclear energy, and emergency preparedness, as well as
health-related and environmental issues and non-proliferation. In this context,
cooperation will also include the further development of policies and legal and
regulatory frameworks based on EU legislation and practices, as well as on
International Atomic Energy Agency (IAEA) standards. The Parties shall promote
civil scientific research in the fields of nuclear safety and security,
including joint research and development activities, and training and mobility
of scientists.

3.           The cooperation shall
address the problems which have arisen as a consequence of the Chernobyl
disaster, as well as the decommissioning of the Chernobyl nuclear plant, in
particular:

(a)
the Shelter Implementation Plan (SIP) to
transform the existing destroyed unit 4 (Shelter object) into an environmentally
safe system;

(b)
spent nuclear fuel management;

(c)
de-contamination of the territories;

(d)
radioactive waste management;

(e)
monitoring of the environment;

(f)
other areas that may be mutually agreed, such as
medical, scientific, economic, regulatory, social and administrative aspects of
efforts to mitigate the consequences of the disaster.

CHAPTER
2

MACRO-ECONOMIC
COOPERATION

Article 343

The EU and Ukraine shall facilitate the
process of economic reform by co-operating to improve understanding of the
fundamentals of their respective economies and the formulation and
implementation of economic policy in market economies. Ukraine shall strive to
establish a functioning market economy and to gradually approximate its
policies to the policies of the EU, in accordance with the guiding principles
of macroeconomic stability, sound public finances and a sustainable balance of
payments.

Article 344

To these ends, the Parties shall cooperate
to:

(a)
exchange information on macroeconomic
performance and prospects and on strategies for development;

(b)
analyse jointly economic issues of mutual interest,
including economic policy measures and the instruments for implementing them,
such as methods for economic forecasting and elaboration of strategic policy
documents, with a view to strengthening Ukraine's policy-making in line with EU
principles and practices;

(c)
exchange expertise in the sphere of
macro-economy;

(d)
cooperation will also include exchange of
information concerning the principles and functioning of the European Economic
and Monetary Union (EMU).

Article 345

A regular dialogue will take place on the
issues covered by Chapter 2 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
3

MANAGEMENT
OF PUBLIC FINANCES: BUDGET POLICY, INTERNAL CONTROL AND EXTERNAL AUDIT.

Article 346

Cooperation in the field of the management
of public finances shall aim at ensuring the development of budget policy and
sound systems of public internal control and external audit, on the basis of
international standards, and which are compatible with the fundamental
principles of accountability, transparency, economy, efficiency and
effectiveness.

Article 347

The Parties shall exchange information,
experience, best practice and take other actions, in particular on the
following:

1.           In the area of budget
policy:

(a)
development of a medium-term budget
forecast/planning system;

(b)
improvement of programme-targeted approaches in
the budget process and analysis of the efficiency and effectiveness of the
implementation of budget programmes;

(c)
improvement in the exchange of information and
experience on planning and execution of the budget and on public debt.

2.           In the area of external
audit:

(d)
implementation of the International Organisation
of Supreme Audit Institutions (INTOSAI) standards and methods as well as
exchange of best practices of the EU in the field of external control and audit
of public finances, paying particular attention to the independence of the
relevant bodies of the Parties;

(e)
cooperation on the elaboration of the
methodology of external audit, with particular emphasis on state budget
revenues according to international standards and best practices.

3.           In the area of public
internal financial control:

–
further developing the public internal financial
control system through harmonisation with internationally-agreed standards
(Institute of Internal Auditors (IIA), International Federation of Accountants
(IFAC), INTOSAI) and methodologies, as well as EU best practice for internal
control and internal audit in state bodies;

4.           In the area of the fight
against fraud:

–
improvement of methods aimed at combating and
preventing fraud and corruption in the area covered by Chapter 3 of Title V (Economic
and Sector Co-operation) of this Agreement, including cooperation between
relevant administrative bodies.

Article 348

A regular dialogue will take place on the
issues covered by Chapter 3 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
4

TAXATION

Article 349

The Parties shall cooperate to enhance good
governance in the tax area, with a view to the further improvement of economic
relations, trade, investment and fair competition.

Article 350

With reference to Article 349 of this
Agreement, the Parties recognise and commit themselves to implementing the
principles of good governance in the tax area, i.e. the principles of
transparency, exchange of information and fair tax competition, as subscribed
to by Member States at EU level. To that end, without prejudice to EU and
Member States competences, the Parties will improve international cooperation
in the tax area, facilitate the collection of legitimate tax revenues, and
develop measures for the effective implementation of the abovementioned
principles.

Article 351

The Parties shall also enhance and
strengthen their cooperation aimed at the improvement and development of
Ukraine's tax system and administration, including the enhancement of
collection and control capacity, with a specific focus on Value Added Tax (VAT)
refund procedures, to avoid accumulation of arrears, ensure effective tax
collection and reinforce the fight against tax fraud and tax avoidance. The
Parties shall strive to enhance cooperation and sharing of experiences in
combating tax fraud, in particular carousel fraud.

Article 352

The Parties shall develop their cooperation
and harmonise policies in counteracting and fighting fraud and smuggling of
excisable products. This cooperation will include, inter alia, the gradual
approximation of excise rates on tobacco products, as far as possible, taking
into account the constraints of the regional context, including through a
dialogue at regional level and in line with the World Health Organisation
Framework Convention on Tobacco Control of 2003. To this end, the Parties will
look to strengthen their cooperation within the regional context.

Article 353

Gradual approximation to the taxation
structure as laid down in the EU acquis shall be carried out in accordance with
Annex XXVIII to this Agreement.

Article 354

A regular dialogue will take place on the
issues covered by Chapter 4 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
5

STATISTICS

Article 355

The Parties shall develop and strengthen
their cooperation on statistical issues, thereby contributing to the long-term
objective of providing timely, internationally comparable and reliable
statistical data. It is expected that a sustainable, efficient and
professionally independent national statistical system shall produce
information relevant to citizens, businesses and decision-makers in Ukraine and
in the EU, thus enabling them to take informed decisions. The national
statistical system should respect the UN Fundamental Principles of Official
Statistics, taking into account the EU acquis, in statistics
including the European Statistics Code of Practice, in order to harmonise the
national statistical system with the European norms and standards. The acquis
in statistics is set out in the annually updated Statistical Requirements
Compendium, which is considered by the Parties as annexed to this Agreement (Annex
XXIX).

Article 356

Cooperation shall aim at:

(a)
further strengthening the capacity of the
national statistical system, focusing on a sound legal basis, adequate data and
metadata dissemination policy and user- friendliness;

(b)
gradual approximation of the Ukrainian
statistical system with the European Statistical System;

(c)
fine-tuning of data provision to the EU, taking
into account the application of relevant international and European
methodologies, including classifications;

(d)
enhancing the professional and management
capacity of the national statistical staff to facilitate the application of EU
statistical standards and to contribute to the development of the Ukrainian
statistical system;

(e)
exchanging experience between the Parties on the
development of statistical know-how;

(f)
promoting total quality management of all
statistical production processes and dissemination.

Article 357

The Parties shall cooperate within the framework
of the European Statistical System, in which Eurostat is the EU statistical
authority. Such cooperation shall focus, inter alia, on the areas of:

(a)
population statistics, including censuses;

(b)
agricultural statistics, including agricultural
censuses and environment statistics;

(c)
business statistics, including business
registers and the use of administrative sources for statistical purposes;

(d)
energy, including balances;

(e)
national accounts;

(f)
foreign trade statistics;

(g)
regional statistics;

(h)
total quality management of all statistical
production processes and dissemination.

Article 358

The Parties shall, inter alia, exchange
information and expertise, and shall develop their cooperation, taking into
account the already accumulated experience in reforming the statistical system
within the framework of various assistance programmes. Efforts shall be directed
towards further gradual approximation to the EU acquis in
statistics on the basis of the national strategy for the development of the
Ukrainian statistical system, while taking into account the development of the
European Statistical System. In the statistical data production process,
emphasis will be placed on further development of sample surveys, while taking
into account the need to reduce the response burden. The data shall be relevant
to the designing and monitoring of policies in all key areas of social and
economic life.

Article 359

A regular dialogue shall take place on the
issues covered by Chapter 5 of Title V (Economic and Sector Co-operation) of
this Agreement. To the extent possible, the activities undertaken within the
European Statistical System should be open to Ukrainian participation under the
normal participation rules for third countries.

CHAPTER
6

ENVIRONMENT

Article 360

The Parties
shall develop and strengthen their cooperation on environmental issues, thereby
contributing to the long-term objective of sustainable development and green
economy. It is expected that enhanced environmental protection will bring
benefits to citizens and businesses in Ukraine and in the EU, including through
improved public health, preserved natural resources, increased economic and
environmental efficiency, integration of environment into other policy areas, and
higher production as a result of modern technologies. Cooperation shall be
conducted in the best interests of the Parties on the basis of equality and
mutual benefit while also taking into account interdependence existing between
the Parties in the field of environmental protection and related multilateral
agreements.

Article 361

Cooperation
shall aim at preserving, protecting, improving, and rehabilitating the quality
of the environment, protecting human health, prudent and rational utilisation
of natural resources and promoting measures at international level to deal with
regional or global environmental problems, inter alia in the areas of:

(a)
climate change;

(b)
environmental governance and horizontal issues,
including education and training, and access to environmental information and
decision-making processes;

(c)
air quality;

(d)
water quality and water resource management,
including marine environment;

(e)
waste and resource management;

(f)
nature protection, including conservation and
protection of bio and landscape diversity (eco-networks);

(g)
industrial pollution and industrial hazards;

(h)
chemicals;

(i)
genetically modified organisms, including in the
field of agriculture;

(j)
noise pollution;

(k)
civil protection, including natural and man-made
hazards;

(l)
urban environment;

(m)
environmental fees.

Article 362

1.           The Parties shall, inter
alia:

(a)
exchange information and expertise;

(b)
implement joint research activities and exchange
of information on cleaner technologies;

(c)
plan the handling of disasters and other
emergency situations;

(d)
implement joint activities at regional and
international level, including with regard to multilateral environmental
agreements ratified by the Parties and joint activities in the framework of
relevant agencies as appropriate.

2.           The Parties shall pay
special attention to transboundary issues.

Article 363

Gradual
approximation of Ukrainian legislation to EU law and policy on environment
shall proceed in accordance with Annex XXX to this Agreement.

Article 364

Cooperation in the civil protection sector
shall take place through the implementation of specific agreements in this
field concluded between the Parties according to the respective powers and
competences of the EU and its Member States and in accordance with the legal
procedures of each Party. It shall aim inter alia at:

(a)
facilitating mutual assistance in case of
emergencies;

(b)
exchanging on a 24-hour basis early warnings and
updated information on cross-border emergencies, including requests for and
offers of assistance;

(c)
assessment of the environmental impact of
disasters;

(d)
inviting experts to specific technical workshops
and symposia on civil protection issues;

(e)
inviting, on a case-by-case basis, observers to
specific exercises and training activities organised by the EU and/or Ukraine;

(f)
strengthening existing cooperation on the most
effective use of available civil protection capabilities.

Article 365

The cooperation shall cover, inter alia, at
the following objectives:

(a)
development of an overall strategy on
environment, covering planned institutional reforms (with timetables) for
ensuring implementation and enforcement of environmental legislation; division
of competence for the environmental administration at national, regional and
municipal levels; procedures for decision-making and the implementation of
decisions; procedures for promotion of integration of environment into other
policy areas; identification of the necessary human and financial resources and
a review mechanism;

(b)
development of sector strategies on air quality;
water quality and resource management, including marine environment; waste and
resource management; nature protection; industrial pollution and industrial
hazards and chemicals, including clearly defined timetables and milestones for
implementation, administrative responsibilities as well as financing strategies
for investments in infrastructure and technology;

(c)
development and implementation of a policy on
climate change, in particular as listed in Annex XXXI to this Agreement.

Article 366

A regular dialogue will take place on the
issues covered by Chapter 6 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
7

TRANSPORT

Article 367

The Parties shall:

(a)
expand and strengthen their transport
cooperation in order to contribute to the development of sustainable transport
systems;

(b)
promote efficient, safe and secure transport
operations as well as intermodality and interoperability of transport systems;

(c)
endeavour to enhance the main transport links
between their territories.

Article 368

1.           Cooperation between the
Parties shall aim to facilitate the restructuring and modernisation of
Ukraine’s transport sector and gradual approximation towards operating
standards and policies comparable to those in the EU, in particular by
implementing the measures set out in Annex XXXII to this Agreement, without
prejudice to obligations stemming from specific transport agreements concluded
between the Parties. Implementation of the above-mentioned measures shall not
contravene the rights and obligations of the Parties under international
agreements to which they are parties, or their participation in international
organisations.

2.           Cooperation shall also aim
at improving the movement of passengers and goods, increasing fluidity of
transport flows between Ukraine, the EU and third countries in the region, by
removing administrative, technical, cross-border and other obstacles, improving
transport networks and upgrading the infrastructure in particular on the main
axes connecting the Parties. This cooperation shall include actions to
facilitate border-crossings.

3.           Cooperation shall include
information exchange and joint activities:

–
at regional level, in particular taking into
consideration and integrating progress achieved under various regional
transport cooperation arrangements such as the Eastern Partnership Transport
Panel, the Transport Corridor Europe-Caucasus-Asia (TRACECA), the Baku process
and other transport initiatives;

–
at international level, including with regard to
international transport organisations and international agreements and conventions
ratified by the Parties, in the framework of the various transport agencies of
the EU.

Article 369

This cooperation shall cover, inter alia,
the following areas:

(a)
development of a sustainable national transport
policy covering all modes of transport, particularly with a view to ensuring
efficient, safe and secure transport systems and promoting the integration of transport
considerations into other policy areas;

(b)
development of sector strategies in light of the
national transport policy (including legal requirements for the upgrading of
technical equipment and transport fleets to meet the highest international
standards) for road, rail, inland waterway, aviation, maritime transport and
intermodality, including timetables and milestones for implementation,
administrative responsibilities and financing plans;

(c)
development of the multimodal transport network
connected to the Trans European Transport Network (TEN-T) and improvement of infrastructure
policy in order to better identify and evaluate infrastructure projects in the
various modes of transport. Development of funding strategies focusing on
maintenance, capacity constraints and missing link infrastructure as well as
activating and promoting the participation of the private sector in transport
projects as set out in Annex XXXIII to this Agreement;

(d)
accession to relevant international transport
organisations and agreements including procedures for ensuring strict
implementation and effective enforcement of international transport agreements
and conventions;

(e)
scientific and technical cooperation and
exchange of information for the development and improvement of technologies,
such as intelligent transport systems;

(f)
promotion of the use of intelligent transport
systems and information technology in managing and operating all modes of
transport as well as supporting intermodality and cooperation in the use of
space systems and commercial applications facilitating transport.

Article 370

A regular dialogue will take place on the
issues covered by Chapter 7 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
8

SPACE

Article 371

1.           The Parties shall promote mutually
beneficial cooperation on civil space research and space applications, in
particular in the following areas:

(a)
global navigation satellite systems;

(b)
earth observation and global monitoring;

(c)
space science and exploration;

(d)
applied space technologies, including launcher
and propulsion technology.

2.           The Parties will encourage
and promote the exchange of experience on space policy, administration and
legal aspects, as well as on industrial restructuring and the commercialisation
of space technologies.

Article 372

1.           Cooperation will include
the exchange of information on each other’s policies and programmes and the
relevant opportunities for cooperation and joint projects, including
participation of Ukrainian entities in the relevant Space and Transport themes
of the next EU Framework Programme for Research and Innovation Horizon 2020.

2.           The Parties will encourage
and support exchanges of scientists and the creation of relevant networks.

3.           Cooperation could also
cover the exchange of experience on the management of space research and science
institutions, as well as the development of an environment conducive to
research and the application of new technologies and adequate protection of the
relevant intellectual, industrial and commercial property rights.

Article 373

A regular dialogue will take place on the
issues covered by Chapter 8 of Title V (Economic and Sector Co-operation) of
this Agreement including as appropriate coordination and cooperation with the
European Space Agency on these and other relevant topics.

CHAPTER
9

COOPERATION
IN SCIENCE AND TECHNOLOGY

Article 374

The Parties shall develop and strengthen
their scientific and technological cooperation in order to contribute both to
scientific development itself, and to reinforce their scientific potential for
contributing to the resolution of national and global challenges. The Parties
shall endeavour to contribute to progress in acquiring scientific and
technological knowledge relevant to sustainable economic development, by
strengthening their research capacities and human potential. The sharing and
pooling of scientific knowledge will contribute to the competitiveness of the
Parties, by increasing the ability of their economies to generate and use
knowledge to commercialise new products and services. Finally, the Parties will
develop their scientific potential in order to fulfil their global
responsibilities and commitments in areas such as health-related issues,
environmental protection including climate change and other global challenges.

Article 375

1.           Such cooperation shall
take into account the current formal framework for cooperation established by
the Agreement on Cooperation in Science and Technology between the European
Community and Ukraine, as well as the Ukrainian objective of gradual
approximation to EU policy and legislation on science and technology.

2.           Cooperation between the
Parties shall aim at facilitating the involvement of Ukraine in the European
Research Area.

3.           Such cooperation shall
assist Ukraine in reforming and reorganising its science management system and
research institutions (including boosting its capacity for research and
technological development), in order to support the development of a
competitive economy and knowledge society.

Article 376

Cooperation shall take place particularly
through:

(a)
exchange of information on each other’s science
and technology policies;

(b)
participation in the next EU Framework Programme
for Research and Innovation Horizon 2020;

(c)
joint implementation of scientific programmes
and research activities;

(d)
joint research and development activities aimed
at encouraging scientific progress and the transfer of technology and know-how;

(e)
training through mobility programmes for
researchers and specialists ;

(f)
the organisation of joint scientific and
technological development events/measures;

(g)
implementation measures aimed at the development
of an environment conducive to research and the application of new technologies
and adequate protection of the intellectual property results of research;

(h)
enhancement of cooperation at regional and international
level, notably in the Black Sea context, and within multilateral organisations
such as the United Nations Educational, Scientific and Cultural Organisation
(UNESCO), the Organisation for Economic Cooperation and Development (OECD) and
the Group of 8 (G8), as well as in the context of multilateral agreements such
as the UN Framework Convention on Climate Change (UNFCCC) of 1992;

(i)
exchange of expertise on management of research
and science institutions in order to develop and improve their capacities of
conducting and participating in scientific researches.

Article 377

A regular dialogue will take place on the
issues covered by Chapter 9 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
10

INDUSTRIAL
AND ENTERPRISE POLICY

Article 378

The Parties shall develop and strengthen
their cooperation on industrial and enterprise policy, thereby improving the
business environment for all economic operators, but with particular emphasis
on Small and Medium Sized Enterprises (SMEs). Enhanced cooperation should
improve the administrative and regulatory framework for both Ukrainian and EU
businesses operating in Ukraine and in the EU, and should be based on the EU’s
SME and industrial policies, taking into account internationally recognised principles
and practices in this field.

Article 379

To these ends, the Parties shall cooperate
in order to:

(a)
implement strategies for SME development, based
on the principles of the European Charter for Small Enterprises, and monitor the
implementation process through annual reporting and dialogue. This cooperation
will also include a focus on micro- and craft enterprises, which are extremely
important for both the EU and Ukrainian economies;

(b)
create better framework conditions, via the
exchange of information and good practice, contributing to greater competitiveness.
This cooperation will include the management of structural changes
(restructuring) and environmental and energy issues, such as energy efficiency
and cleaner production;

(c)
simplify and rationalise regulations and
regulatory practice, with specific focus on exchange of good practice as regards
regulatory techniques, including the EU’s principles;

(d)
encourage the development of innovation policy,
via the exchange of information and good practice regarding the
commercialisation of research and development (including support instruments
for technology-based business start-ups), cluster development and access to
finance;

(e)
encourage more contacts between EU and Ukrainian
businesses and between these businesses and the authorities in Ukraine and in the
EU;

(f)
support the establishment of export promotion
activities in Ukraine;

(g)
facilitate the modernisation and restructuring
of both Ukrainian and EU industry in certain sectors.

Article 380

A regular dialogue will take place on the
issues covered by Chapter 10 of Title V (Economic and Sector Co-operation) of
this Agreement. This will involve representatives of EU and Ukrainian
businesses.

CHAPTER
11

MINING
AND METALS

Article 381

The Parties shall develop and strengthen
their cooperation in relation to the mining and metals industries, with a view
to promoting mutual understanding, improvement of the business environment,
information exchange and cooperation on non-energy issues, relating in
particular to the mining of metallic ores and industrial minerals. This
cooperation is without prejudice to the provisions regarding
to coal as referred to in Article
339 of this Agreement.

Article 382

To these ends, the Parties shall cooperate
in order to:

(a)
exchange information on the basic situations of
their mining and metals industries;

(b)
exchange information on the outlook for the EU
and Ukrainian mining and metals industries in terms of consumption, production
and market forecast;

(c)
exchange information on measures taken by the
Parties in order to facilitate the restructuring process in these sectors;

(d)
exchange information and best practices in
relation to the sustainable development of the mining and metals industries in
Ukraine and in the EU.

CHAPTER
12

FINANCIAL
SERVICES

Article 383

Recognising that an effective set of rules
and practices in the area of financial services is needed to establish a
fully-functioning market economy and in order to foster trade exchanges among
the Parties, the Parties agree to cooperate in the area of financial services with
a view to:

(a)
supporting the process of adapting financial
services regulation to the needs of an open market economy;

(b)
ensuring effective and adequate protection of
investors and other consumers of financial services;

(c)
ensuring the stability and integrity of the
global financial system;

(d)
promoting cooperation between different actors
of the financial system, including regulators and supervisors;

(e)
ensuring independent and effective supervision.

Article 384

1.           The Parties shall
encourage cooperation between relevant regulatory and supervisory authorities,
including information exchange, sharing of expertise on financial markets and
other such measures.

2.           Special attention shall be
paid to the development of the administrative capacity of such authorities, inter
alia through personnel exchanges and joint training.

Article 385

The Parties
shall promote gradual approximation to recognised international standards on
regulation and supervision in the area of financial services. Relevant parts of
the EU acquis in the area of financial services are covered in Chapter 6
(Establishment, Trade in Services, and Electronic Commerce) of Title IV (Trade
and Trade-related Matters) of this Agreement.

Article 386

A regular dialogue will take place on the
issues covered by Chapter 12 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
13

COMPANY
LAW, CORPORATE GOVERNANCE, ACCOUNTING AND AUDITING

Article 387

1.           Recognising the importance
of an effective set of rules and practices in the areas of company law and
corporate governance, as well as in accounting and auditing, for creating a
fully-functioning market economy and for fostering trade, the Parties agree to
cooperate:

(a)
on the protection of shareholders, creditors and
other stakeholders in line with EU rules in this area, as listed in Annex XXXIV
to this Agreement;

(b)
on the introduction of relevant international
standards at national level and gradual approximation to EU law in the field of
accounting and auditing, as listed in Annex XXXV to this Agreement;

(c)
on further development of corporate governance
policy in line with international standards, as well as gradual approximation
to the EU rules and recommendations in this area, as listed in Annex XXXVI to
this Agreement.

2.           The Parties will aim at
sharing information and expertise on both existing systems and relevant new
developments in these areas. In addition, the Parties will seek to improve
information exchange between the national register of Ukraine and business
registers of EU Member States.

Article 388

A regular dialogue will take place on the
issues covered by Chapter 13 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
14

INFORMATION
SOCIETY

Article 389

The Parties shall step up cooperation on
the development of the Information Society to benefit citizens and businesses
through the widespread availability of Information and Communication Technology
(ICT) and through better quality of services at affordable prices. This
cooperation will also facilitate the access to the markets for electronic
communication services, encouraging competition and investment in the sector.

Article 390

Cooperation shall aim at implementing
national Information Society strategies, developing of a comprehensive
regulatory framework for electronic communications, and increasing Ukraine’s
participation in the ICT research activities of the EU.

Article 391

Cooperation shall cover the following
subjects:

(a)
promotion of broadband access, improvement of
network security and more widespread use of ICT by citizens, business and administrations
by developing local content for the Internet and introducing online services,
in particular e-business, e-government, e-health and e-learning;

(b)
coordination of electronic communication
policies with a view to making optimal use of the radio spectrum and interoperability
of networks in Ukraine and the EU;

(c)
strengthening of the independence and
administrative capacity of the national regulator in the field of
communications in order to ensure its ability to take appropriate regulatory
measures and enforce its own decisions and all applicable regulations, and to
guarantee fair competition in the markets. The national regulator in the field
of communications should cooperate with the competition authority on the monitoring
of these markets;

(d)
promotion of joint projects for research in the
field of information and communications technology in the next EU Framework
Programme for Research and Innovation Horizon 2020.

Article 392

The Parties
shall exchange information, best practices and experience, undertake joint
actions with the aim of developing a comprehensive regulatory framework and
ensure efficient functioning of, and undistorted competition in, the electronic
communications markets.

Article 393

The Parties shall promote cooperation
between Ukraine’s national regulator in the field of communications and the
national regulators of the EU.

Article 394

1.           The Parties shall promote
gradual approximation to the EU law and regulatory framework in the sphere of
information society and electronic communication.

2.           Relevant provisions as
well as the EU acquis concerning information society and electronic
communication are covered in Appendix XVII-3 (Rules applicable to
telecommunication services) to Chapter 6 (Establishment, Trade in Services, and
Electronic Commerce) of Title IV (Trade and Trade-related Matters) of this
Agreement.

Article 395

A regular dialogue will take place on the
issues covered by Chapter 14 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
15

AUDIO-VISUAL
POLICY

Article
396

1.           The Parties shall
cooperate to promote the audiovisual industry in Europe and encourage
co-production in the fields of cinema and television.

2.           Cooperation could include,
inter alia, the training of journalists and other professionals from
both the printed and electronic media, as well as support to the media (public
and private), so as to reinforce their independence, professionalism and links with
other European media in compliance with European standards, including standards
of the Council of Europe.

Article 397

Gradual approximation to the EU law and
regulatory framework and international instruments in the area of audio-visual
policy shall be carried out in particular as set out in Annex XXXVII to this
Agreement.

Article 398

A regular dialogue will take place on the
issues covered by Chapter 15 of TITLE V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
16

TOURISM

Article 399

The Parties shall cooperate in the field of
tourism with the aim of developing a more competitive tourism industry, as a
generator of economic growth and empowerment, employment and foreign exchange.

Article 400

1.           Cooperation at bilateral,
regional and European levels would be based on the following principles:

(a)
respect for the integrity and interests of local
communities, particularly in rural areas;

(b)
the importance of cultural heritage;

(c)
positive interaction between tourism and
environmental preservation.

2.           Relevant provisions concerning
tour operators are contained in Chapter 6 (Establishment, Trade in Services,
and Electronic commerce) of Title IV (Trade and Trade-related Matters) of this
Agreement. Relevant provisions concerning movement of persons are covered by
Article 19 of this Agreement.

Article 401

Cooperation shall focus on the following
aspects:

(a)
exchange of information, best practices,
experience and “know-how” transfer, including on innovative technologies;

(b)
establishment of a strategic partnership between
public, private and community interests in order to ensure the sustainable
development of tourism;

(c)
promotion and development of tourism products
and markets, infrastructure, human resources and institutional structures;

(d)
development and implementation of efficient
policies and strategies, including appropriate legal, administrative and
financial aspects;

(e)
tourism training and capacity building designed
to improve service standards;

(f)
development and promotion of community-based
tourism.

Article 402

A regular dialogue will take place on the
issues covered by Chapter 16 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
17

AGRICULTURE
AND RURAL DEVELOPMENT

Article 403

The Parties shall cooperate to promote
agricultural and rural development, in particular through gradual approximation
of policies and legislation.

Article 404

Cooperation between the Parties in the
field of agriculture and rural development shall cover, inter alia, the
following areas:

(a)
facilitating mutual understanding of
agricultural and rural development policies;

(b)
enhancing administrative capacities at central
and local levels for the planning, evaluation and implementation of policies;

(c)
promoting modern and sustainable agricultural
production, respectful of the environment and of animal welfare, including
extension of the use of organic production methods and the use of
biotechnologies, inter alia through the implementation of best practices
in those fields;

(d)
sharing knowledge and best practices of rural
development policies to promote economic well-being for rural communities;

(e)
improving the competitiveness of the
agricultural sector and the efficiency and transparency of the markets as well
as conditions for investment;

(f)
disseminating knowledge through training and
information events;

(g)
favouring innovation through research and promoting
extension services to agricultural producers;

(h)
enhancing harmonisation of issues addressed within
the framework of international organisations;

(i)
exchanging best practices on support mechanisms
for agricultural policies and rural areas;

(j)
promoting the policy of quality of agricultural
products in the areas of product standards, production requirements and quality
schemes.

Article 405

In pursuing the above cooperation, without
prejudice to Title IV (Trade and Trade-related Matters) of this Agreement, the Parties shall support gradual approximation to the relevant EU law
and regulatory standards, in particular those as listed in Annex XXXVIII to
this Agreement.

Article 406

A regular dialogue will take place on the
issues covered by Chapter 17 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
18

FISHERIES
AND MARITIME POLICIES

Section
1

Fisheries
policy

Article 407

1.           The Parties shall cooperate
on mutually beneficial matters of common interest in the fisheries sector,
including conservation and management of living aquatic resources, inspection
and control, data collection, and the fight against illegal, unreported and
unregulated fishing.

2.           Such cooperation will
respect their international obligations concerning management and conservation
of living aquatic resources.

Article 408

The Parties shall take joint actions,
exchange information and provide support to each other in order to promote:

(a)
good governance and best practices in fisheries
management with a view to ensuring conservation and management of fish stocks
in a sustainable manner, and based on the ecosystem approach;

(b)
responsible fishing and fisheries management
consistent with the principles of sustainable development, so as to conserve
fish stocks and ecosystems in a healthy state;

(c)
cooperation through Regional Fisheries
Management Organisations (RFMOs).

Article 409

With reference to Article 408 of this
Agreement, and taking into account the best scientific advice, the Parties
shall step up the cooperation and co-ordination of their activities in the
field of management and conservation of living aquatic resources in the Black
Sea. The Parties will promote wider international cooperation in the Black Sea
with the aim of developing relations within an appropriate RFMO.

Article 410

The Parties will support initiatives, such
as mutual exchange of experience and providing support, designed to ensure the
implementation of a sustainable fisheries policy based on priority areas in the
EU acquis in this field, including:

(a)
management of living aquatic resources, fishing
effort and technical measures;

(b)
inspection and control of fishing activities,
using the necessary surveillance equipment, including a vessel monitoring
system, as well as development of corresponding administrative and judicial
structures capable of applying appropriate measures;

(c)
harmonised collection of catch, landing, fleet,
biological and economic data;

(d)
management of fishing capacity, including a
functioning fishing fleet register;

(e)
improving the efficiency of the markets, in
particular by promoting producer organisations, providing information to
consumers, and through marketing standards and traceability;

(f)
development of a structural policy for the
fisheries sector, paying particular attention to the sustainable development of
coastal communities.

Section
2

Maritime
policy

Article 411

Taking into account their cooperation in
the spheres of fisheries, transport, environment and other sea-related
policies, the Parties shall also develop cooperation on an integrated maritime
policy, in particular:

(a)
promoting an integrated approach to maritime
affairs, good governance and exchange of best practices in the use of the
marine space;

(b)
establishing a framework for arbitrating between
competing human activities and managing their impact on the marine environment
by promoting maritime spatial planning as a tool contributing to improved
decision-making;

(c)
promoting sustainable development of coastal
regions and maritime industries as a generator of economic growth and
employment, including through the exchange of best practices;

(d)
promoting strategic alliances between maritime
industries, services and scientific institutions specialising in marine and
maritime research, including the building of cross-sectoral maritime clusters;

(e)
endeavouring to improve maritime safety and
security measures and to enhance cross-border and cross-sectoral maritime
surveillance in order to address the increasing risks related to intensive
maritime traffic, operational discharges of vessels, maritime accidents and
illegal activities at sea building upon the experience of the Coordination and
Information Centre in Bourgas;

(f)
establishing a regular dialogue and promoting
different networks between maritime stakeholders.

Article 412

This cooperation shall include:

(a)
exchange of information, best practices,
experience and maritime “know-how” transfer, including on innovative
technologies in maritime sectors;

(b)
exchange of information and best practices on
financing options for projects, including public-private partnerships;

(c)
enhancing cooperation between the Parties in the
relevant international maritime fora.

Section
3

Regular
dialogue on fisheries and maritime policies

Article 413

A regular dialogue between the Parties will
take place on the issues covered by Section 1 and Section 2 of Chapter 18 of Title
V (Economic and Sector Co-operation) of this Agreement.

CHAPTER
19

DANUBE
RIVER

Article 414

Bearing in mind the transboundary nature of
the Danube river basin and its historical importance for riparian communities, the
Parties shall:

(a)
implement more rigorously the international
commitments made by EU Member States and Ukraine in the spheres of navigation,
fisheries, protection of the environment, in particular of aquatic ecosystems,
including conservation of living aquatic resources, to achieve good ecological
status, as well as in other relevant spheres of human activity;

(b)
support, where necessary, initiatives to develop
bilateral and multilateral agreements and arrangements with the aim of
encouraging sustainable development, and paying special attention to respecting
traditional lifestyles in riparian communities and the pursuit of economic
activity through integrated use of the Danube river basin.

CHAPTER
20

CONSUMER
PROTECTION

Article 415

The Parties shall cooperate in order to
ensure a high level of consumer protection and to achieve compatibility between
their systems of consumer protection.

Article 416

In order to achieve these objectives, the
cooperation shall comprise, in particular:

(a)
promotion of exchange of information on consumer
protection systems;

(b)
provision of expertise on legislative and
technical capacity to enforce legislation and market surveillance systems;

(c)
improvement of information provided to
consumers;

(d)
training activities for administration officials
and persons representing consumer interests;

(e)
encouraging the development of independent
consumer associations and contacts between consumer representatives.

Article 417

Ukraine shall gradually approximate its
legislation to the EU acquis, as set out in Annex XXXIX to this
Agreement, while avoiding barriers to trade.

Article 418

A regular dialogue will take place on the
issues covered by Chapter 20 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
21

COOPERATION
ON EMPLOYMENT, SOCIAL POLICY AND EQUAL OPPORTUNITIES

Article 419

Taking account of Chapter 13 (Trade and Sustainable
Development) of Title IV (Trade and Trade-related Matters) of this Agreement,
the Parties shall strengthen their dialogue and cooperation on promoting the
decent work agenda, employment policy, health and safety at work, social
dialogue, social protection, social inclusion, gender equality and non-discrimination.

Article 420

Cooperation in the area covered by Article
419 of this Agreement shall pursue the following goals:

(a)
improve the quality of human life;

(b)
meet common challenges, such as globalisation
and demographic change;

(c)
aim at more and better jobs with decent working
conditions;

(d)
promote social fairness and justice, while
reforming labour markets;

(e)
promote conditions of labour markets that
combine flexibility with security;

(f)
promote active labour market measures and
improve efficiency of employment services to match the needs of the labour
market;

(g)
foster more inclusive labour markets that
integrate disadvantaged people;

(h)
reduce the informal economy by transforming
undeclared work;

(i)
improve the level of protection of health and
safety at work, including by education and training on health and safety
issues, promotion of preventive measures, prevention of major accident hazards,
management of toxic chemicals, and exchange of good practice and research in
this area;

(j)
enhance the level of social protection and
modernise social protection systems, in terms of quality, accessibility, and
financial sustainability;

(k)
reduce poverty and enhance social cohesion;

(l)
aim at gender equality and ensure equal
opportunities for women and men in employment, education, training, economy and
society, and decision-making;

(m)
combat discrimination on all grounds;

(n)
enhance the capacity of social partners and
promote social dialogue;

Article 421

The Parties shall encourage the involvement
of all relevant stakeholders, in particular social partners, as well as civil
society organisations, in Ukraine’s policy reforms and in the cooperation
between the Parties under this Agreement.

Article 422

The Parties shall promote corporate social
responsibility and accountability and encourage responsible business practices,
such as those promoted by the UN Global Compact of 2000, the International Labour Organization
(ILO) Tripartite Declaration of Principles concerning
Multinational Enterprises and Social Policy of 1977 as amended in 2006, and the
OECD Guidelines for Multinational Enterprises of 1976 as amended in 2000.

Article 423

The Parties shall aim at enhancing
cooperation on employment and social policy matters in all relevant regional,
multilateral and international fora and organisations.

Article 424

Ukraine shall ensure gradual approximation
to EU law, standards and practices in the area of employment, social policy and
equal opportunities, as set out in Annex XL to this Agreement.

Article 425

A regular dialogue will take place on the issues
covered by Chapter 21 of Title V (Economic and Sector Co-operation) of this
Agreement.

CHAPTER
22

PUBLIC
HEALTH

Article 426

The Parties shall develop their cooperation
in the public health field, to raise the level of public health safety and
protection of human health as a precondition for sustainable development and
economic growth.

Article 427

1.           Such cooperation shall
cover, in particular, the following areas:

(a)
strengthening of the public health system and
its capacity in Ukraine, in particular through implementation of reforms,
further development of primary health care, and training of staff;

(b)
prevention and control of communicable diseases,
such as HIV/AIDS and tuberculosis, increased preparedness regarding highly
pathogenic disease outbreaks, and implementation of the International Health
Regulations;

(c)
prevention and control of non-communicable
diseases, through exchange of information and good practices, promoting healthy
lifestyles, addressing major health determinants and problems, such as mother
and child health, mental health, and addiction to alcohol, drugs and tobacco,
including implementation of the Framework Convention on Tobacco Control of 2003;

(d)
quality and safety of substances of human
origin, such as blood, tissues and cells;

(e)
health information and knowledge, including as
regards the ‘health in all policies’ approach.

2.           To that end, the Parties
shall exchange data and best practise, and undertake other joint activities,
including via the “health in all policies” approach and through the gradual
integration of Ukraine into the European networks in the public health field.

Article 428

Ukraine shall gradually approximate its
legislation and practice to the principles of the EU acquis, in
particular regarding communicable diseases, blood, tissues and cells, as well
as tobacco. A list of selected EU acquis elements is included in
Annex XLI to this Agreement.

Article 429

A regular dialogue will take place on the
issues covered by Chapter 22 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
23

EDUCATION,
TRAINING, AND YOUTH

Article 430

Fully respecting the responsibility of the
Parties for the content of teaching and the organisation of education systems
and their cultural and linguistic diversity, the Parties shall promote
cooperation in the field of education, training and youth in order to enhance
mutual understanding, promote intercultural dialogue and increase the knowledge
of their respective cultures.

Article 431

The Parties shall undertake to intensify
cooperation in the field of higher education, aiming, in particular at:

(a)
reforming and modernising the higher education
systems;

(b)
promoting convergence in the field of higher
education deriving from the Bologna process;

(c)
enhancing the quality and relevance of higher
education;

(d)
stepping up cooperation between higher education
institutions;

(e)
building up the capacity of higher education
institutions;

(f)
increasing student and teacher mobility:
attention will be paid to cooperation in the field of education with a view to
facilitating access to higher education.

Article 432

The Parties shall endeavour to increase the
exchange of information and expertise, in order to encourage closer cooperation
in the field of vocational education and training with a view, in particular,
to:

(a)
developing systems of vocational education and
training, and further professional training throughout the working life, in
response to the needs of the changing labour market;

(b)
establishing a national framework to improve the
transparency and recognition of qualifications and skills drawing, where
possible, on the EU experience.

Article 433

The Parties shall examine the possibility
of developing their cooperation in other areas, such as secondary education,
distance education, and life-long learning.

Article 434

The Parties agree to encourage closer
cooperation and exchange of experience in the field of youth policy and
non-formal education for young people, with the aim of:

(a)
facilitating the integration of young people
into society at large by encouraging their active citizenship and spirit of
initiative;

(b)
helping young people acquire knowledge, skills
and competencies outside the educational systems, including through
volunteering, and recognising the value of such experiences;

(c)
enhancing cooperation with third countries;

(d)
promoting cooperation between youth
organisations in Ukraine and in the EU and its Member States;

(e)
promoting healthy lifestyles, with a particular
focus on youth.

Article 435

The Parties shall cooperate taking into
consideration the provisions of the recommendations listed in Annex XLII to
this Agreement.

Article 436

A regular dialogue will take place on the
issues covered by Chapter 23 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
24

CULTURE

Article 437

The Parties shall undertake to promote
cultural cooperation in order to enhance mutual understanding and foster
cultural exchanges, as well as to boost the mobility of art and artists from
the EU and Ukraine.

Article 438

The Parties shall encourage intercultural
dialogue between the individuals and organisations representing organised civil
society and cultural institutions in the EU and in Ukraine.

Article 439

The Parties shall closely cooperate in
relevant international fora, including United Nations Educational, Scientific
and Cultural Organisation (UNESCO) and the Council of Europe (CoE), inter alia,
in order to develop cultural diversity, and to preserve and valorise cultural
and historical heritage.

Article 440

The Parties shall endeavour to develop a
regular policy dialogue on culture in order to foster the development of
cultural industries in the EU and in Ukraine. To this end, the Parties shall
implement properly the UNESCO Convention on the Protection and Promotion of the
Diversity of Cultural Expressions of 2005.

CHAPTER
25

COOPERATION
IN THE FIELD OF SPORT AND PHYSICAL ACTIVITY

Article 441

1.           The Parties shall
cooperate in the field of sport and physical activity in order to help develop
a healthy lifestyle among all age groups, to promote the social functions and
educational values of sport and to fight against threats to sport such as
doping, match-fixing, racism and violence.

2.           Such cooperation shall, in
particular, include the exchange of information and good practices in the
following areas:

(a)
promotion of physical activity and sport through
the educational system, in cooperation with public institutions and
non-governmental organisations;

(b)
sports participation and physical activity as a
means to contribute to a healthy lifestyle and general well-being;

(c)
development of national competence and
qualifications systems in the sport sector;

(d)
integration of disadvantaged groups through sport;

(e)
the fight against doping;

(f)
the fight against match-fixing;

(g)
security during major international sporting
events.

Article 442

A regular dialogue will take place on the
issues covered by Chapter 25 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
26

CIVIL
SOCIETY COOPERATION

Article 443

The Parties shall foster civil society
cooperation, aiming at the following objectives:

(a)
to strengthen contacts and encourage mutual
exchange of experience between all sectors of civil society in the EU Member
States and in Ukraine;

(b)
to involve civil society organisations in the
implementation of this Agreement, including its monitoring, and in the
development of EU-Ukraine bilateral relations;

(c)
to ensure a better knowledge and understanding
of Ukraine, including its history and culture, in the EU Member States;

(d)
to ensure a better knowledge and understanding
of the European Union within Ukraine, including the values on which it is
founded, its functioning and its policies.

Article 444

The Parties shall promote dialogue and
cooperation between civil society stakeholders from both sides as an integral
part of EU-Ukraine relations, by means of:

(a)
strengthening of contacts and mutual exchange of
experience between civil society organisations in the EU Member States and in
Ukraine, in particular through professional seminars, training, etc;

(b)
facilitating institution-building and
consolidation of civil society organisations, including, amongst others,
advocacy, informal networking, visits, workshops, etc;

(c)
enabling the familiarisation of Ukrainian
representatives with the process of consultation and dialogue between social
and civil partners in the EU, with a view to integrating civil society into the
policy process in Ukraine.

Article 445

A regular dialogue will take place on the
issues covered by Chapter 26 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
27

CROSS-BORDER
AND REGIONAL COOPERATION

Article 446

The Parties shall promote mutual
understanding and bilateral cooperation in the field of regional policy, on
methods of formulation and implementation of regional policies, including
multi-level governance and partnership, with special emphasis on the
development of disadvantaged areas and territorial cooperation, hereby establishing
channels of communication and enhancing exchange of information between
national, regional and local authorities, socio-economic actors and civil
society.

Article 447

The Parties shall support and strengthen
the involvement of local and regional-level authorities in cross-border and
regional cooperation and the related management structures, to enhance
cooperation through the establishment of an enabling legislative framework, to
sustain and develop capacity-building measures and to promote the strengthening
of cross-border and regional economic and business networks.

Article 448

The Parties shall strive to develop cross-border
and regional elements of, inter alia, transport, energy, communication
networks, culture, education, tourism, health and other areas covered by this Agreement
which have a bearing on cross-border and regional cooperation. In particular,
the Parties shall encourage the development of cross-border cooperation in regard
to modernisation, equipping and co-ordination of emergency services.

Article 449

A regular dialogue will take place on the
issues covered by Chapter 27 of Title V (Economic and Sector Co-operation) of
this Agreement.

CHAPTER
28

PARTICIPATION IN EUROPEAN UNION AGENCIES AND PROGRAMMES

Article 450

Ukraine shall be allowed to participate in
EU agencies relevant to the implementation of this Agreement and other EU
agencies, where their establishing regulations permit, and as laid down by
these establishing regulations. Ukraine shall enter into separate agreements
with the EU to enable its participation in each such agency including the
amount of financial contribution.

Article 451

Ukraine shall be allowed to participate in
all current and future programmes of the Union that are opened to the
participation of Ukraine in accordance with the relevant provisions adopting
those programmes. Ukraine’s participation in the programmes of the Union shall
be in accordance with the provisions laid down in the annexed Protocol III on a
Framework Agreement between the European Union and Ukraine on the General
Principles for the Participation of Ukraine in Union Programmes of 2010.

Article 452

The EU shall inform Ukraine in the case of
establishment of new EU agencies and new programmes of the Union, as well as
regarding changes in terms of participation in the programmes of the Union and
agencies, mentioned in the Articles 450 and 451 of this Agreement.

TITLE VI

FINANCIAL COOPERATION, WITH ANTI-FRAUD PROVISIONS

TITLE VI

FINANCIAL COOPERATION, WITH ANTI-FRAUD PROVISIONS

Article 453

Ukraine shall benefit from financial
assistance through the relevant EU funding mechanisms and instruments. Such financial
assistance will contribute to achieving the objectives of this Agreement and
will be provided in accordance with the following Articles of this Agreement.

Article 454

The main principles of financial assistance
shall be as envisaged in the relevant EU Financial Instrument Regulations.

Article 455

The priority areas of the EU financial
assistance agreed by the Parties shall be laid down in relevant indicative
programmes reflecting agreed policy priorities. The indicative amounts of
assistance established in these indicative programmes shall take into account
Ukraine’s needs, sector capacities and progress with reforms.

Article 456

In order to make the best use of the
resources available, the Parties shall endeavour to have EU assistance
implemented in close cooperation and coordination with other donor countries,
donor organisations and international financial institutions, and in line with international
principles of aid effectiveness.

Article 457

The fundamental legal, administrative and
technical basis of financial assistance shall be established within the
framework of relevant agreements between the Parties.

Article 458

The Association Council shall be informed
of the progress and implementation of financial assistance, and its impact upon
pursuing the objectives of this Agreement. To that end, the relevant bodies of
the Parties shall provide appropriate monitoring and evaluation information on
a mutual and permanent basis.

Article 459

1.           The Parties shall
implement assistance in accordance with the principles of sound financial
management and shall cooperate in protecting of the financial interests of the
EU and of Ukraine as set out in Annex XLIII to this Agreement. The Parties
shall take effective measures to prevent and fight fraud, corruption and any
other illegal activities, inter alia by means of mutual administrative
assistance and mutual legal assistance in the fields covered by this Agreement.

2.           To this end, Ukraine shall
also gradually approximate its legislation in line with the provisions as set
out in Annex XLIV to this Agreement.

3.           Annex XLIII to this
Agreement shall be applicable to any further agreement or financing instrument
to be concluded between the Parties, and any other EU financing instrument to
which Ukraine may be associated, without prejudice to any other additional
clauses covering audits, on-the-spot checks, inspections, controls, and
anti-fraud measures, such as, inter alia, those conducted by the European
Anti-Fraud Office (OLAF) and the European Court of Auditors (ECA).

TITLE VII

INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

TITLE VII

INSTITUTIONAL, GENERAL AND FINAL PROVISIONS

CHAPTER
1

INSTITUTIONAL
FRAMEWORK

Article 460

1.           The highest level of
political and policy dialogue between the Parties shall be at Summit level. Summit
meetings shall take place in principle once a year. The Summit shall provide
overall guidance for the implementation of this Agreement as well as an
opportunity to discuss any bilateral or international issues of mutual
interest.

2.           At ministerial level,
regular political and policy dialogue shall take place within the Association
Council established by Article 461 of this Agreement and within the framework
of regular meetings between representatives of the Parties by mutual agreement.

Article 461

1.           An Association Council is
hereby established. It shall supervise and monitor the application and
implementation of this Agreement and periodically
review the functioning of this Agreement in the light of its objectives.

2.           The Association Council
shall meet at ministerial level at regular intervals, at least once a year, and
when circumstances require. The Association Council shall meet in all necessary configurations, by mutual agreement.

3.           In addition to supervising
and monitoring the application and implementation of this Agreement, the
Association Council shall examine any major issues arising within the framework
of this Agreement and any other bilateral or international issues of mutual
interest.

Article 462

1.           The Association Council
shall consist of members of the Council of the European Union and members of
the European Commission, on the one hand, and of members of the Government of
Ukraine, on the other.

2.           The Association Council
shall establish its own rules of procedure.

3.           The Association Council
shall be chaired in turn by a representative of the Union and a representative
of Ukraine.

4.           Where appropriate, and by mutual
agreement, other bodies will take part as observers in the work of the
Association Council.

Article 463

1.           For the purpose of
attaining the objectives of this Agreement, the Association Council shall have
the power to take decisions within the scope of this Agreement, in the cases
provided for therein. Such decisions shall be binding upon the Parties, which
shall take appropriate measures, including if necessary action in specific
bodies established under this Agreement, to implement the decisions taken. The
Association Council may also make recommendations. It shall adopt its decisions
and recommendations by agreement between the Parties, following completion of
the respective internal procedures.

2.           In line with the objective
of gradual approximation of Ukraine’s legislation to that of the Union as laid
down in this Agreement, the Association Council will be a forum for exchange of
information on European Union and Ukrainian legislative acts, both under
preparation and in force, and on implementation, enforcement and compliance
measures.

3.           The Association Council
may update or amend the Annexes to this Agreement to this effect, taking into
account the evolution of EU law and applicable standards set out in
international instruments deemed relevant by the Parties, without prejudice to
any specific provisions included in Title IV (Trade and Trade-related Matters) of this Agreement.

Article 464

1.           An Association Committee
is hereby established. It shall assist the Association Council in the
performance of its duties. This provision is without prejudice to the
responsibilities of the various fora for the conduct of political dialogue as
set out in Article 5 of this Agreement.

2.           The Association Committee
shall be composed of representatives of the Parties, in principle at senior
civil servant level.

3.           The Association Committee
shall be chaired in turn by a representative of the Union and a representative
of Ukraine.

Article 465

1.           The Association Council
shall determine in its rules of procedure the duties and functioning of the
Association Committee, whose responsibilities shall include the preparation of
meetings of the Association Council. The Association Committee shall meet at
least once a year.

2.           The Association Council
may delegate to the Association Committee any of its powers, including the
power to take binding decisions.

3.           The Association Committee
shall have the power to adopt decisions in the cases provided for in this
Agreement and in areas in which the Association Council has delegated powers to
it. These decisions shall be binding upon the Parties, which shall take
appropriate measures to implement them. The Association Committee shall adopt its
decisions by agreement between the Parties.

4.           The Association Committee
shall meet in a specific configuration to address all issues related to Title
IV (Trade and Trade-related Matters) of this Agreement. The Association
Committee shall meet in this configuration at least once a year.

Article 466

1. The Association Committee shall be
assisted by sub-committees established under this Agreement.

2. The Association Council may decide to
set up any special committee or body in specific areas necessary for the
implementation of this Agreement, and shall determine the composition, duties
and functioning of such bodies. In
addition, such special committees and bodies may hold discussions on any matter
that they consider relevant without prejudice to any of the specific provisions
of Title IV (Trade and Trade-related Matters) of this Agreement.

3. The Association Committee may also
create sub-committees to take stock of progress achieved in the regular
dialogues referred to in Title V (Economic and Sector Co-operation) of this
Agreement.

4. The sub-committees shall have the powers
to take decisions in the cases provided for in this Agreement. They shall
report on their activities to the Association Committee regularly, as required.

5. The sub-committees established under
Title IV of this Agreement shall inform the Association Committee in its Trade
configuration under Article 465.4 of this Agreement, of the date and agenda of
their meetings sufficiently in advance of their meetings. They shall report on
their activities at each regular meeting of the Association Committee in Trade
configuration, as established under Article 465.4 of this Agreement.

6. The existence of any of the
sub-committees shall not prevent either Party from bringing any matter directly
to the Association Committee established under Article 464 of this Agreement,
including in its Trade configuration.

Article 467

1.           A Parliamentary
Association Committee is hereby established. It shall be a forum for Members of
the European Parliament and of the Verkhovna Rada of Ukraine to meet and
exchange views. It shall meet at intervals which it shall itself determine.

2.           The Parliamentary
Association Committee shall consist of Members of the European Parliament, on
the one hand, and of Members of the Verkhovna Rada of Ukraine, on the other.

3.           The Parliamentary
Association Committee shall establish its own rules of procedure.

4.           The Parliamentary
Association Committee shall be chaired in turn by a representative of the
European Parliament and a representative of the Verkhovna Rada of Ukraine
respectively, in accordance with the provisions to be laid down in its rules of
procedure.

Article 468

1.           The Parliamentary
Association Committee may request relevant information regarding the
implementation of this Agreement from the Association Council, which shall then
supply the Committee with the requested information.

2.           The Parliamentary
Association Committee shall be informed of the decisions and recommendations of
the Association Council.

3.           The Parliamentary
Association Committee may make recommendations to the Association Council.

4.           The Parliamentary Association
Committee may establish Parliamentary Association sub-committees.

Article 469

1.           The Parties will also
promote regular meetings of representatives of their civil societies, in order
to keep them informed of, and gather their input for, the implementation of
this Agreement.

2.           A Civil Society Platform
is hereby established. It shall consist of members of the European Economic and
Social Committee (EESC) on the one hand, and representatives of civil society
on the side of Ukraine, on the other, as a forum to them to meet and exchange
views. The Civil Society Platform shall meet at intervals which it shall itself
determine.

3.           The Civil Society Platform
shall establish its own rules of procedure.

4.           The Civil Society Platform
shall be chaired in turn by a representative of the European Economic and
Social Committee and representatives of civil society on the Ukrainian side
respectively, in accordance with the provisions to be laid down in its rules of
procedure.

Article 470

1.           The Civil Society Platform
shall be informed of the decisions and recommendations of the Association
Council.

2.           The Civil Society Platform
may make recommendations to the Association Council.

3.           The Association Committee
and Parliamentary Association Committee shall organize regular contacts with
representatives of the Civil Society Platform in order to obtain their views on
how to attain the objectives of this Agreement.

CHAPTER
2

GENERAL
AND FINAL PROVISIONS

Article 471

Access
to courts and administrative organs

Within the scope of this Agreement, each
Party undertakes to ensure that natural and legal persons of the other Party
have access that is free of discrimination in relation to its own nationals to
its competent courts and administrative organs, to defend their individual rights
and property rights.

Article 472

Measures
related to essential security interests

Nothing in this Agreement shall prevent a
Party from taking any measures:

(a)
which it considers necessary to prevent the
disclosure of information contrary to its essential security interests;

(b)
which relate to the production of, or trade in,
arms, munitions or war materials or to research, development or production
indispensable for defence purposes, provided that such measures do not impair
the conditions of competition in respect of products not intended for
specifically military purposes;

(c)
which it considers essential to its own
security, in the event of serious internal disturbances affecting the
maintenance of law and order, in time of war or serious international
tension constituting threat of war, or in order to carry out obligations it has
accepted for the purpose of maintaining peace and international security.

Article 473

Non-discrimination

1.           In
the fields covered by this Agreement and without prejudice to any special provisions
contained therein:

(a)
the arrangements applied by Ukraine in respect
of the Union or its Member States shall not give rise to any discrimination
between the Member States, their nationals, companies or firms;

(b)
the arrangements applied by the Union or its Member
States in respect of Ukraine shall not give rise to any discrimination between
Ukrainian nationals, companies or firms.

2.           The provisions of
paragraph 1 shall be without prejudice to the right of the Parties to apply the
relevant provisions of their fiscal legislation to taxpayers who are not in
identical situations as regards their place of residence.

Article 474

Gradual approximation

In line with the objectives of this
Agreement as set out in Article 1, Ukraine will carry out gradual approximation
of its legislation to EU law as referred to in Annexes I to XLIV to this
Agreement, based on commitments identified in Titles IV, V and VI of this
Agreement, and according to the provisions of those Annexes. This provision
shall be without prejudice to any specific principles and obligations on
regulatory approximation under Title IV (Trade and Trade-related Matters) of
this Agreement.

Article 475

Monitoring

1.           Monitoring shall mean the
continuous appraisal of progress in implementing and enforcing measures covered
by this Agreement.

2.           Monitoring
shall include assessments of approximation of Ukrainian law to EU law as
defined in this Agreement, including aspects of implementation and enforcement.
These assessments may be conducted individually, or, by agreement, jointly by
the Parties. To facilitate the assessment process, Ukraine shall report to the
EU on progress in approximation, where appropriate before the end of the
transitional periods set out in this Agreement in relation to EU legal acts.
The reporting and assessment process, including modalities and frequency of
assessments will take into account specific modalities defined in this
Agreement or decisions by the institutional bodies established under this
Agreement.

3.           Monitoring
may include on-the-spot missions, with the participation of EU institutions,
bodies and agencies, non-governmental bodies, supervisory authorities,
independent experts and others as needed.

4.           The
results of monitoring activities, including the assessments of approximation as
set out in paragraph 2 of this Article, shall be discussed in all relevant
bodies established under this Agreement. Such bodies may adopt joint
recommendations, agreed unanimously, which shall be submitted to the
Association Council.

5.           If
the Parties agree that necessary measures covered by Title IV (Trade and Trade-related Matters) of this Agreement have been implemented and are being
enforced, the Association Council, under the powers conferred on it by Article
463 of this Agreement, shall
agree on further market opening as defined in Title IV (Trade and
Trade-related Matters) of this Agreement.

6.           A
joint recommendation as referred to in paragraph 4 of this Article, submitted
to the Association Council, or failure to reach such a recommendation, shall
not be subject to dispute settlement as defined in Title IV (Trade and Trade-related Matters) of this Agreement. A decision taken by the relevant
institutional body, or failure to take such a decision, shall not be subject to
dispute settlement as defined in Title IV (Trade and Trade-related
Matters) of this Agreement.

Article 476

Fulfilment
of obligations

1.           The Parties shall take any
general or specific measures required to fulfil their obligations under this
Agreement. They shall ensure that the objectives set out in this Agreement are
attained.

2.           The Parties agree to
consult promptly through appropriate channels at the request of either Party,
to discuss any matter concerning the interpretation, implementation, or good
faith application of this Agreement and other relevant aspects of the relations
between the Parties.

3.           Each Party shall refer to
the Association Council any dispute related to the interpretation, implementation
or good faith application of this Agreement in accordance with Article 477 of
this Agreement. The Association Council may settle a dispute by means of a
binding decision.

Article 477

Dispute
Settlement

1.           When a dispute arises
between the Parties concerning the interpretation, implementation, or good
faith application of this Agreement, any Party shall submit to the other Party
and the Association Council a formal request that the matter in dispute be
resolved. By way of derogation, disputes concerning the interpretation,
implementation, or good faith application of Title IV (Trade and Trade-related
Matters) of this Agreement shall be exclusively governed by Chapter 14 (Dispute
Settlement) of Title IV (Trade and Trade-related Matters) of this Agreement.

2.           The Parties shall
endeavour to resolve the dispute by entering into good faith consultations
within the Association Council and other relevant bodies referred to in Articles
461, 465 and 466 of this Agreement, with the aim of reaching a mutually acceptable
solution in the shortest time possible.

3.           The Parties shall provide
the Association Council and other relevant bodies with all the information
required for a thorough examination of the situation.

4.           As long as a dispute is
not resolved, it shall be discussed at every meeting of the Association
Council. A dispute shall be deemed to be resolved when the Association Council
has taken a binding decision to settle the matter as provided in paragraph 3 of
Article 476 of this Agreement,
or when it has declared that the dispute is at an end.
Consultations on a dispute can also be held at any meeting of the Association
Committee or any other relevant body referred to in Articles 461, 465 and 466 of this Agreement, as agreed between the Parties or at the request
of either of the Parties. Consultations may also be held in writing.

5.           All information disclosed
during the consultations shall remain confidential.

Article 478

Appropriate
measures in case of non-fulfilment of obligations

1.           A Party may take
appropriate measures, if the matter at issue is not resolved within three
months of the date of notification of a formal request for dispute settlement
according to Article 477 of this Agreement and if the complaining Party
continues to consider that the other Party has failed to fulfil an obligation
under this Agreement. The requirement for a three-month consultation period
shall not apply to exceptional cases as set out in paragraph 3 of this Article.

2.           In the selection of
appropriate measures, priority shall be given to those which least disturb the
functioning of this Agreement. Except in cases described in paragraph 3 of this
Article, such measures may not include the suspension of any rights or
obligations provided for under provisions of this Agreement, mentioned in Title
IV (Trade and Trade-related Matters) of this Agreement. These measures shall be
notified immediately to the Association Council and shall be the subject of
consultations in accordance with paragraph 2 of Article 476 of this Agreement,
and of dispute settlement in accordance with paragraph 3 of Article 476 and
Article 477 of this Agreement.

3.           The exceptions referred to
in paragraphs 1 and 2 above shall concern:

(a)
denunciation of the Agreement not sanctioned by
the general rules of international law, or

(b)
violation by the other Party of any of the
essential elements of this Agreement, referred to in Article 2 of this Agreement.

Article 479

Relation
to other agreements

1.           The Partnership and
Cooperation Agreement between the European Communities and their Member States,
on the one hand, and Ukraine, on the other hand, signed in Luxembourg on 14
June 1994 and which entered into force on 1 March 1998 as well as its Protocols
is hereby repealed.

2.           This Association Agreement
replaces the aforementioned agreement. References to the aforementioned
agreement in all other agreements between the Parties shall be construed as
referring to this Agreement.

3.           This
Agreement shall not, until equivalent rights for individuals and economic
operators have been achieved under this Agreement, affect rights ensured to
them through existing agreements binding one or more Member States, on the one
hand, and Ukraine, on the other hand.

4.           Existing agreements
relating to specific areas of cooperation falling within the scope of this
Agreement shall be considered part of the overall bilateral relations as
governed by this Agreement and as forming part of a common institutional
framework.

5.           The
Parties may complement this Agreement by concluding specific agreements in any
area falling within its scope. Such specific agreements shall be an integral
part of the overall bilateral relations as governed by this Agreement and shall
form part of a common institutional framework.

6.           Without
prejudice to the relevant provisions of the Treaty on European Union and the
Treaty on the Functioning of the European Union, neither this Agreement nor
action taken hereunder shall in any way affect the powers of the Member States
to undertake bilateral cooperation activities with Ukraine or to conclude,
where appropriate, new cooperation agreements with Ukraine.

Article 480

Annexes
and Protocols

The
Annexes and Protocols to this Agreement shall form an integral part thereof.

Article 481

Duration

1.           This Agreement is
concluded for an unlimited period. The Parties shall provide for a
comprehensive review of the achievement of objectives under this Agreement
within five years of its entry into force, and at any other time by
mutual consent of the Parties.

2.           Either Party may denounce
this Agreement by notifying the other Party. This Agreement shall terminate six
months from the date of receipt of such notification.

Article 482

Definition of the Parties

For the
purposes of this Agreement, the term "Parties" shall mean the Union, or
its Member States, or the Union and its Member States, in accordance with
their respective powers as derived from the Treaty on
the Functioning of the
European Union, of the one part, and Ukraine of the other part. Where
relevant, it refers to Euratom, in accordance with its powers under the Euratom
Treaty.

Article 483

Territorial application

This Agreement shall apply, on the one hand,
to the territories in which the Treaty on European Union (TEU), the Treaty on
the Functioning of the European Union (TFEU) and the Treaty establishing the
European Atomic Energy Community are applied, under the conditions laid down in
those Treaties, and to the territory of Ukraine on the other hand.

Article 484

Depository of the Agreement

The General Secretariat of the Council of the
European Union shall be the depository of this Agreement.

Article 485

Authentic Texts

This Agreement is drawn up in the Bulgarian,
Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek,
Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian,
Slovak, Slovenian, Spanish, Swedish and Ukrainian languages, each text being
equally authentic.

Article 486

Entry into force and provisional
application

1.           The Parties shall ratify
or approve this Agreement in accordance with their own procedures. The
instruments of ratification or approval shall be deposited with the General
Secretariat of the Council of the European Union.

2.           This Agreement shall enter
into force on the first day of the second month following the date of deposit
of the last instrument of ratification or approval.

3.           Notwithstanding paragraph
2, the Union and Ukraine agree to provisionally apply this Agreement in part,
as specified by the Union, as
set out in paragraph 4 of this Article, and in accordance with their respective
internal procedures and legislation as applicable.

4.           The provisional application
shall be effective from the first day of the second month following the date of
receipt by the Depositary of the following:

–
the Union's notification on the completion of
the procedures necessary for this purpose, indicating the parts of the Agreement
that shall be provisionally applied; and

–
Ukraine's deposit of the instrument of
ratification in accordance with its procedures and applicable legislation.

5.           For the purpose of the
relevant provisions of this Agreement, including its respective Annexes and
Protocols, any reference in such provisions to the “date of entry into force of
this Agreement” shall be understood to the “date from which this Agreement is
provisionally applied” in accordance with paragraph 3 of this Article.

6.           During
the period of the provisional application, in so far as the provisions of the
Partnership and Cooperation Agreement between the European Communities and
their Member States, on the one hand, and Ukraine, on the other hand, signed in
Luxembourg on 14 June 1994 and which entered into force on 1 March 1998, are
not covered by the provisional application of this Agreement, they continue to
apply.

7.           Either Party may give
written notification to the Depositary of its intention to terminate the
provisional application of this Agreement. Termination of provisional
application shall take effect six months after receipt of the notification by the
Depositary.

List of Annexes

ANNEXES OF TITLE IV

Annex I-A to Chapter 1 || Elimination of custom duties

Appendix A || Indicative aggregate TRQs for imports into the EU

Appendix B || Indicative aggregate TRQs for imports into Ukraine

Annex I-B to Chapter 1 || Additional conditions of trade for worn clothing

Annex I-C to Chapter 1 || Schedules of export duty elimination

Annex I-D to Chapter 1 || Safeguard measures for export duties

Annex II to Chapter 2   || Safeguard measures on passenger cars

Annex III to Chapter 3 || List of legislation for alignment, with a timetable for its implementation

Annex IV-A to Chapter 4 || Coverage

Annex IV-B to Chapter 4 || Animal welfare standards

Annex IV-C to Chapter 4 || Other measures

Annex IV-D to Chapter 4 || Measures to be included after the approximation of legislation

Annex V to Chapter 4 || Comprehensive strategy for the implementation of this Chapter

Annex VI – A to Chapter 4 || Animal and fish diseases subject to notification, for which the status of the Parties is recognised and for which regionalisation decisions may be taken

Annex VI – B to Chapter 4 || Recognition of the pest status, pest-free areas or protected zones

Annex VII to Chapter 4 || Regionalisation/zoning, pest-free areas and protected zones

Annex VIII to Chapter 4 || Provisional approval of establishments

Annex IX to Chapter 4 || Process of determination of equivalence

Annex X to Chapter 4 || Guidelines for conducting verifications

Annex XI to Chapter 4 || Import checks and inspection fees

Annex XII to Chapter 4 || Certification

Annex XIII to Chapter 4 || Outstanding issues

Annex XIV to Chapter 4 || Compartmentalisation

Annex XV to Chapter 5 || Approximation of customs legislation

Annex XVI to Chapter 6 || List of reservations on establishment; List of commitments on cross-border supply of services; List of reservations on contractual services suppliers and independent professionals

Annex XVI – A to Chapter 6 || EU reservations on establishment

Annex XVI – B to Chapter 6 || List of commitments on cross-border services

Annex XVI – C to Chapter 6 || Reservations on contractual services suppliers and independent professionals (EU Party)

Annex XVI – D to Chapter 6 || Ukraine reservations to establishment

Annex XVI – E to Chapter 6 || Ukraine commitments on cross-border services

Annex XVI – F to Chapter 6 || Reservations on contractual services suppliers and independent professionals (Ukraine)

Annex XVII || Regulatory approximation

Appendix XVII –1 || Horizontal adaptations and procedural rules

Appendix XVII -2 || Rules applicable to financial services

Appendix XVII – 3 || Rules applicable to telecommunication services

Appendix XVII – 4 || Rules applicable to postal and courier services

Appendix XVII – 5 || Rules applicable to international maritime transport

Appendix XVII – 6 || Provisions on monitoring

Annex XVIII to Chapter 6 || Enquiry Points

Annex XIX to Chapter 6 || EU indicative list of relevant product and services markets to be analysed according to Article 28

Annex XX to Chapter 6 || Ukraine indicative list of relevant markets to be analysed according to Article 28

Annex XXI to Chapter 8 || Annex to Public Procurement

Annex XXI – A to Chapter 8 || Indicative time schedule for institutional reform, legislative approximation and market access

Annex XXI – B to Chapter 8 || Basic elements of Directive 2004/18/EC (Phase 2)

Annex XXI – C to Chapter 8 || Basic elements of Directive 89/665/EEC

Annex XXI – D to Chapter 8 || Basic elements of Directive 2004/17/EC

Annex XXI – E to Chapter 8 || Basic elements of Council Directive 92/13/EEC of 25 February 1992 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurements procedures of entities operating in the water, energy, transport, and telecommunications sectors (hereinafter referred to as "Directive 92/13/EEC")

Annex XXI – F to Chapter 8 || Other non-mandatory elements of Directive 2004/18/EC (phase 4)

Annex XXI – G to Chapter 8 || Other mandatory elements of Directive 2004/18/EC (phase 4)

Annex XXI – H to Chapter 8 || Other elements of Directive 89/665/EEC

Annex XXI – I to Chapter 8 || Other non-mandatory elements of Directive 2004/17/EC

Annex XXI – J to Chapter 8 || Provisions of Directive 92/13/EEC

Annex XXI – K to Chapter 8 || Provisions of Directive 2004/18/EC

Annex XXI – L to Chapter 8 || Provisions of Directive 2004/17/EC

Annex XXI – M to Chapter 8 || Provisions of Directive 89/665/EEC

Annex XXI – N to Chapter 8 || Provisions of Directive 92/13/EEC

Annex XXI – O to Chapter 8 || Ukraine: Indicative list of issues for cooperation

Annex XXII – A to Chapter 9 || Geographical indications - Legislation of the Parties and elements for registration and control

Annex XXII – B to Chapter 9 || Geographical indications – Criteria to be included in the objection procedure

Annex XXII – C to Chapter 9 || Geographical indications of agricultural products and foodstuffs as referred to in Article 202(3) of this Agreement

Annex XXII – D to Chapter 9 || Geographical indications of wines, aromatised wines and spirit drinks as referred to in Article 202(3) and Article 202(4) of this Agreement

Annex XXIII to Chapter 10 || Glossary of Terms

Annex XXIV to Chapter 14 || Rules of procedure for dispute settlement

Annex XXV to Chapter 15 || Code of conduct for members of arbitration panels and mediators

ANNEXES OF TITLE V

Annex XXVI to Chapter 1 || Energy cooperation, including nuclear issues

Annex XXVII to Chapter 1 || Energy cooperation, including nuclear issues

Annex XXVIII to Chapter 4 || Taxation

Annex XXIX to Chapter 5 || Statistics

Annex XXX to Chapter 6 || Environment

Annex XXXI to Chapter 6 || Environment

Annex XXXII to Chapter 7 || Transport

Annex XXXIII to Chapter 7 || Transport

Annex XXXIV to Chapter13 || Company law, Corporate Governance, Accounting and Auditing

Annex XXXV to Chapter 13 || Company law, Corporate Governance Accounting and Auditing

Annex XXXVI to Chapter 13 || Company law, Corporate Governance Accounting and Auditing

Annex XXXVII to Chapter 15 || Audiovisual Policy

Annex XXXVIII to Chapter 17 || Agriculture and Rural Development

Annex XXXIX to Chapter 20 || Consumer Protection

Annex XL to Chapter 21 || Cooperation on Employment, Social Policy and Equal Opportunities

Annex XLI to Chapter 22 || Public Health

Annex XLII to Chapter 23 || Education, Training and Youth ANNEXES OF TITLE VI

Annex XLIII to Title VI || Financial Cooperation, with Anti-Fraud Provisions

Annex XLIV to Title VI || Financial Cooperation, with Anti-Fraud Provisions

PROTOCOLS

Protocol I || Protocol on Rules of Origin

Protocol II || Protocol on Mutual Administrative Assistance

Protocol III || Protocol on a Framework Agreement between the European Union and Ukraine on the General Principles for the Participation of Ukraine in Union Programmes

Joint Declaration on Agreements with other countries

[1]               Unless otherwise provided
in Annexes I and II to this Agreement.

[2]               For the purposes of this Agreement, goods means
products as understood in GATT 1994 unless otherwise provided in this Agreement.

[3]               For the purposes of this
Article, the determination of developing country shall take into consideration
the lists issued by international organisations such as the World Bank, the
Organisation for Economic Co-operation and Development (hereinafter referred to
as the "OECD") or the International Monetary Fund (hereinafter
referred to as the "IMF"), etc.

[4]               According to the definition of origin laid down in
Protocol 1 to this Agreement concerning the definition of the concept of
"originating products" and methods of administrative cooperation.

[5]               As evidenced by Ukraine statistics on imports of passenger
cars originating in the EU Party (in units) under the tariff heading 8703.
Ukraine will substantiate these statistics by making available the movement
certificates EUR.1 or invoice declarations issued according to the procedure
laid down in Title V of the Protocol 1 concerning the definition of the concept
of "originating products" and methods of administrative cooperation.

[6]               As evidenced by Ukraine statistics on imports of
passenger cars originating in the EU Party (in units) under the tariff heading
8703. Ukraine will substantiate these statistics by making available the
certificates EUR.1 or invoice declarations issued according to the procedure
laid down in Title V of Protocol 1 concerning the definition of the concept of
"originating products" and methods of administrative cooperation.

[7]               Official statistics on "First registration"
in Ukraine of all passenger cars provided by State Automobile Inspection of
Ukraine.

[8]               Notably Decision No 768/2008/EC
of the European Parliament and of the Council of 9 July 2008 on a common
framework for the marketing of products, and repealing Council Decision
93/465/EEC and Regulation (EC) No 765/2008 of the European Parliament and of
the Council of 9 July 2008 setting out the requirements for accreditation and market
surveillance relating to the marketing of products and repealing Regulation
(EEC) No 339/93.

[9]               As
regards Genetically Modified
Organisms (hereinafter referred to as "GMOs"), the comprehensive
strategy shall include also timetables for approximation of the Ukrainian GMO
legislation to the EU one referred to in Annexe XXIX to Chapter 6 of Title V
(Economic and Sector Co-operation).

[10]             Convention of 20 May 1987 on a common transit
procedure.

[11]             The sole fact of requiring a visa for natural persons
of certain countries and not for those of others shall not be regarded as
nullifying or impairing benefits under the Agreement.

[12]             A legal person is controlled by another legal person if
the latter has the power to name a majority of its directors or otherwise to legally
direct its actions.

[13]             The recipient establishment may be required to submit a
training programme covering the duration of stay for prior approval,
demonstrating that the purpose of the stay is for training. The competent
authorities may require that the training be linked to the university degree
which has been obtained.

[14]             The service contract shall comply with the laws,
regulations and legal requirements of the Party where the contract is executed.

[15]             The service contract shall comply with the laws,
regulations and legal requirements of the Party where the contract is executed.

[16]             Investment protection, other than the treatment
deriving from Article 88 (National treatment), including investor-state dispute
settlement procedure, is not covered by this Chapter.

[17]             For greater certainty, processing of nuclear materials
includes all the activities contained in UN ISIC Rev.3.1 code 2330.

[18]             Without prejudice to the scope of activities which may
be considered as cabotage under the relevant national legislation, national
cabotage under this chapter covers transportation of passengers or goods
between a port or point located in Ukraine or a Member State of the European
Union and another port or point located in Ukraine or Member State of the
European Union, including on its continental shelf, as provided in the UN
Convention on the Law on the Sea and traffic originating and terminating in the
same port or point located in Ukraine or a Member State of the European Union.

[19]             The conditions of mutual market access in air transport
shall be dealt with by the Agreement between the European Union and its Member
States and Ukraine on the establishment of a Common Aviation Area.

[20]             This
obligation does not extend to the investment protection provisions including provisions relating to investor state dispute settlement
procedures, as found in other agreements and which are not covered by this
Chapter.

[21]             This
obligation does not extend to the investment protection provisions not covered
by this Chapter including provisions relating to
investor state dispute settlement procedures, as found in other agreements.

[22]             This includes this Chapter and
Annexes XVI-A and XVI-D.

[23]             The exclusion of audio-visual services from the scope
of this Chapter is without prejudice to the cooperation on audiovisual services
under Title V on Economic and Sector Cooperation of this Agreement.

[24]             Without prejudice to the scope
of activities which may be considered as cabotage under the relevant national
legislation, national maritime cabotage under this Chapter covers
transportation of passengers or goods between a port or point located in
Ukraine or a Member State of the European Union and another port or point
located in Ukraine or a Member State of the European Union, including on its
continental shelf, as provided in the UN Convention on the Law of the Sea and
traffic originating and terminating in the same port or point located in
Ukraine or a Member State of the European Union.

[25]             The
conditions of mutual market access in air transport shall be dealt with by the
Agreement between the European Union and its Member States and Ukraine on the
establishment of a Common Aviation Area.

[26]             All other requirements of the Parties' laws and
regulations regarding entry, stay, work and social security measures shall continue
to apply, including regulations concerning period of stay and minimum wages as
well as collective wage agreements. Commitments on movement of persons do not
apply in cases where the intent or effect of such movement is to interfere in
or otherwise affect the outcome of any labour/management dispute or
negotiation.

[27]             Obtained after having reached the age of majority.

[28]             Where the degree or qualification has not been obtained
in the Party where the service is supplied, that Party may evaluate whether this
is equivalent to a university degree required in its territory.

[29]             Where the degree or qualification has not been obtained
in the Party where the service is supplied, that Party may evaluate whether
this is equivalent to a university degree required in its territory.

[30]             Licensing fees do not include fees for the use of
natural resources, payments for auction, tendering or other non-discriminatory
means of awarding concessions, or mandated contributions to universal service
provision.

[31]             For the EU Party: The indicative list of relevant
product and service markets is submitted as a separate Annex XIX. The list of
relevant markets included in Annex XIX is subject to regular revision by the
EU. Any obligations undertaken on the basis of this Chapter will need to take
into account such revision. For Ukraine: The indicative list of product and
service markets is submitted as a separate Annex XX. The list of relevant
markets included in Annex XX is subject to regular revision by Ukraine under
the acquis approximation process provided for in Article 124. Any
obligations undertaken on the basis of this Chapter will need to take into
account such revision.

[32]             Licensing fees do not include payments for auction,
tendering or other non-discriminatory means of awarding concessions, or
mandated contributions to universal service provision.

[33]             In compliance with the applicable rules on processing
of personal data and the protection of privacy in the electronic communication
sector.

[34]             Maritime Auxiliary Services
include Maritime Cargo Handling Services, Storage and Warehousing Services,
Customs Clearance Services, Container Station and Depot Services, Maritime
Agency Services, (Maritime) Freight Forwarding Services, Rental of Vessels with
Crew, Maintenance and repair of vessels, Pushing and towing services, and
Supporting services for maritime transport.

[35]             Measures that are aimed at ensuring the equitable or
effective imposition or collection of direct taxes include measures taken by a
Party under its taxation system which:            
(i) apply to non-resident investors and service suppliers in recognition of the
fact that the tax obligation of non-residents is determined with respect to
taxable items sourced or located in the Party's territory; or
(ii) apply to non-residents in order to ensure the imposition or collection of
taxes in the Party's territory; or   
(iii) apply to non-residents or residents in order to prevent the avoidance or
evasion of taxes, including compliance measures; or               
(iv) apply to consumers of services supplied in or from the territory of
another Party in order to ensure the imposition or collection of taxes on such
consumers derived from sources in the Party's territory; or
(v) distinguish investors and service suppliers subject to tax on worldwide
taxable items from other investors and service suppliers, in recognition of the
difference in the nature of the tax base between them; or       
(vi) determine, allocate or apportion income, profit, gain, loss, deduction or
credit of resident persons or branches, or between related persons or branches
of the same person, in order to safeguard the Party's tax base.
Tax terms or concepts in paragraph (f) of this provision and in this footnote
are determined according to tax definitions and concepts, or equivalent or
similar definitions and concepts, under the domestic law of the Party taking
the measure.

[36]             Including the acquisition of real estate related to
direct investment.

[37]             Including serious balance of payments difficulties.

[38]             Minor use: use of a plant protection product in a particular
Party on plants or plant products which are not widely grown in that particular
Party or widely grown to meet an exceptional plant protection need.

[39]             For the purposes of this Section, the notion of
"intellectual property rights" should at least cover the following
rights: copyright; rights related to copyright; sui generis right of a
database maker; rights of the creator of the topographies of a semi conductor
product; trademark rights; design rights; patent rights, including rights
derived from supplementary protection certificates; geographical indications;
utility model rights; plant variety rights; trade names in so far as these are
protected as exclusive rights in the national law concerned.

[40]             The exemptions from liability
established in this Article cover only cases where the activity of the
information society service provider is limited to the technical process of
operating and giving access to a communication network over which information
made available by third parties is transmitted or temporarily stored, for the
sole purpose of making the transmission more efficient; this activity is of a
mere technical, automatic and passive nature, which implies that the
information society service provider has neither knowledge of nor control over
the information which is transmitted or stored.

[41]             It is understood that there shall be no obligation to
apply such procedures to imports of goods put on the market in another country
by or with the consent of the right holder.

[42]             For the purposes of this provision, the common European
interest shall encompass the common interest of the Parties.

[43]             General economic interest is understood in the same
sense as it is understood in Article 106 of the Treaty on the Functioning of
the European Union and in particular as provided for in the case law of the EU
Party.

[44]             For the purpose of this Article, "Party" is
to be understood as a Member State with reference to its territory or as
Ukraine with reference to its territory.

[45]             For the avoidance of doubt, this Title shall not be
construed as conferring rights or imposing obligations which can be directly
invoked before the domestic courts of the Parties.

[46]             For the avoidance of doubt, decisions and any alleged
failure to act by bodies created by this Agreement are not subject to this
Chapter

ANNEX

Annex XXIII to XXV to Title IV of the
Association Agreement between the European Union and its and its Member States,
on the one hand, and Ukraine on the other
ANNEX IX
to the

PROPOSAL FOR A COUNCIL DECISION

on the conclusion of the
Association Agreement between the European Union and its Member States, of the
one part, and Ukraine, of the other part, on behalf of the European Union

ANNEX XXIII

Glossary of terms

The following
glossary is intended to illustrate the meaning of certain terms used in Chapter
10 (Competition) of Title IV of this Agreement. This glossary is not legally
binding and remains without prejudice to the provisions included in this
Chapter.

(a)          Areas where the standard of
living is abnormally low or where there is serious underemployment: These are
areas where the economic situation is extremely unfavourable in relation to the
European Union as a whole. This condition is fulfilled if a region or a
sub-national geographical administrative entity, with an average population of approximately
800,000 to 3,000,000 inhabitants, has a per capita gross domestic product
(GDP), measured in purchasing power standards (PPS), of less than 75 % of the Union
average.

(b)          Serious disturbance: The disturbance in question must affect the whole of the
economy of the Party concerned, or one of its Member States. A disturbance is
deemed not to be serious for the purposes of this section if it is limited to
one of the Parties' regions or parts of their territories.

(c)          Service of
general economic interest ("SGEI"): This means economic activities
that public authorities identify as being of particular importance to citizens
and that would not be supplied (or would be supplied under different
conditions) if there was no public intervention. The activity must exhibit
special characteristics as compared with the general economic interest of other
economic activities.

(d)          Public
undertakings: Any undertaking over which the public authorities may exercise
directly or indirectly a dominant influence by virtue of their ownership of it,
their financial participation therein, or the rules which govern it.

(e)          Exclusive rights: These are
rights that are granted by a Member State to one undertaking through any
legislative, regulatory or administrative instrument, reserving it the right to
provide a service or undertake an activity within a given geographical area.

(f)           Special rights: These are rights
that are granted by a Member State to a limited number of undertakings which,
within a given geographical area, and otherwise than
according to objective, proportional and non-discriminatory criteria,

–
limit to two or more the number of such
undertakings authorised to provide a service or undertake an activity, or

–
designate several competing undertakings as
being authorised to provide a service or undertake an activity, or

–
confer on any undertaking or undertakings any
legal or regulatory advantages which substantially affect the ability of any
other undertaking to provide the same service or to operate the same activity
in the same geographical area under substantially equivalent conditions.

(g)          Important project in the common
European interest or in the common interest of the Parties: A project is
important and in the common European interest or in the common interest of the
Parties only if

(i)      the aid concerns a project which is
clearly defined regarding the terms of its implementation including its
participants as well as its objectives;

(ii)     the project must be in the common
European interest in the sense that the advantage achieved by the objective of
the project must not be limited to one Member State or the Member States
implementing it, but must extend to the EU as a whole         
or,

it must be in the common interest of the
Parties, in the sense that the advantage achieved by the objective of the
project must extend to both Parties;

(iii)     the project must be of great
importance with respect to its character and its volume: it must be a
meaningful project with regard to its objectives and a project of a substantial
size.

(h)          State monopoly of commercial
character: State monopolies of a commercial character
are monopolies through which the national, regional or local authorities or
other public bodies of any kind of a Party are in a position, in law or in
fact, to supervise, determine or appreciably influence, either directly or
indirectly, imports or exports between the Parties. The provisions in the
Agreement regarding State monopolies of a commercial character apply likewise
to monopolies delegated by the Parties.

ANNEX
XXIV

RULES
OF PROCEDURE  
FOR DISPUTE SETTLEMENT

GENERAL
PROVISIONS

1.           In Chapter 14 (Dispute
Settlement) of Title IV of the Agreement and under these rules:

“adviser” means a person retained by a Party to
advise or assist that Party in connection with the arbitration panel
proceeding;

“arbitration panel” means a panel established
under Article 307 of the Agreement;

“arbitrator” means a member of an arbitration
panel established under Article 307 of the Agreement;

“assistant” means a person who, under the terms
of appointment of an arbitrator conducts research or provides assistance to the
arbitrator;

“complaining Party” means any Party that
requests the establishment of an arbitration panel under Article 306 of the
Agreement;

“Party complained against” means the Party that
is alleged have acted inconsistently with the Agreement;

“representative of a Party” means an employee
or any person appointed by a government department or agency or any other
public entity of a Party, who represents the Party for the purposes of a
dispute under this Agreement;

“day” means a calendar day.

2.           The Party complained
against shall be in charge of the logistical administration of dispute
settlement proceedings, in particular the organisation of hearings, unless
otherwise agreed. However, both Parties shall share the expenses derived from
organisational matters, including the expenses of the arbitrators.

NOTIFICATIONS

3.           The Parties and the
arbitration panel shall transmit any request, notice, written submission or
other document by delivery against receipt, registered post, courier, facsimile
transmission, telex, telegram or any other means of telecommunication that
provides a record of the sending thereof.

4.           A Party shall provide a
copy of each of its written submissions to the other Party and to each of the
arbitrators. A copy of the document shall also be provided in electronic
format.

5.           All notifications,
including requests for consultations, shall be addressed to the Ministry of Foreign Affairs of Ukraine
and to the Directorate-General for Trade of the European Commission,
respectively.

6.           Minor errors of a clerical
nature in any request, notice, written submission or other document related to the arbitration panel proceeding may be
corrected by delivery of a new document clearly indicating the changes.

7.           If the last day for
delivery of a document falls on a legal holiday of Ukraine or of the
institutions of the European
Union, the document may be delivered on the next business day.

COMMENCING
THE ARBITRATION

8.           Unless the Parties agree
otherwise, they shall meet the arbitration panel within seven days of its
establishment in order to determine such matters that the Parties or the
arbitration panel deem appropriate, including the remuneration and expenses to
be paid to the arbitrators, which will be in accordance with WTO standards.

INITIAL
SUBMISSIONS

9.           The complaining Party
shall deliver its initial written submission no later than 20 days after the
date of establishment of the arbitration panel. The Party complained against
shall deliver its written counter-submission no later than 20 days after the
date of delivery of the initial written submission.

WORKING
OF ARBITRATION PANELS

10.         The chairperson of the
arbitration panel shall preside at all its meetings. An arbitration panel may
delegate to the chairperson authority to make administrative and procedural
decisions.

11.         Unless otherwise provided
in the Agreement and without prejudice to paragraph 24, the arbitration panel
may conduct its activities by any means, including telephone, facsimile
transmissions or computer links.

12.         Only arbitrators may take
part in the deliberations of the arbitration panel, but the arbitration panel
may permit its assistants to be present at its deliberations.

13.         The drafting of any ruling
shall remain the exclusive responsibility of the arbitration panel and shall
not be delegated.

14.         Where a procedural question
arises which is not covered by the provisions of the Agreement and its annexes,
an arbitration panel may adopt any appropriate procedure provided that the
procedure ensures equal treatment between the Parties and is compatible with
the provisions of the Agreement and its annexes.

15.         When the arbitration panel
considers that there is a need to modify any time limit applicable in the
proceedings or to make any other procedural or administrative adjustment, it
shall inform the Parties in writing of the reasons for the change or adjustment
and of the period or adjustment needed. The time limits of Article 310(2) of
the Agreement shall not be modified without the agreement of the Parties.

REPLACEMENT

16.         If an arbitrator is unable
to participate in the proceeding, withdraws, or must be replaced, a replacement
shall be selected in accordance with Article 307(3) and (4) of the Agreement.

17.         Where a Party considers that an arbitrator does not comply with the
requirements of the Code of Conduct and for this reason should be replaced,
this Party should notify the other Party within 15 days from the time at which
it came to know of the circumstances underlying the arbitrator's violation of
the Code of Conduct.

18.         a)       Where a Party
considers that an arbitrator other than the chairperson does not comply with
the requirements of the Code of Conduct, the Parties shall consult and, if they
so agree, replace the arbitrator by selecting a replacement following the
procedure set out in Article 307(3) and (4) of the Agreement.         
b)       If the Parties fail to agree on the need to replace an arbitrator, any
Party may request that such matter be referred to the chairperson of the
arbitration panel, whose decision shall be final.         
c)       If, pursuant to such a request, the chairperson finds that an
arbitrator does not comply with the requirements of the Code of Conduct, she or
he shall select a new arbitrator by lot among the pool of individuals referred
to under Article 323(1) of the Agreement of which the original arbitrator was a
Member. If the original arbitrator was chosen by the Parties pursuant to
Article 307(2) of the Agreement, the replacement shall be selected by lot among
the pools of individuals that have been proposed by the complaining Party and
by the Party complained against under Article 323(1) of the Agreement. The
selection of the new arbitrator shall be done in the presence of the Parties and
within five days of the date of the submission of the request to the
chairperson of the arbitration panel.

19.         a)       Where a Party considers that the chairperson of
the arbitration panel does not comply with
the requirements of the Code of Conduct, the Parties shall consult and, if they
so agree, replace the chairperson by selecting a replacement following the
procedure set out in Article 307(3) and (4) of the Agreement.         
b)       If the Parties fail to agree on the need to replace the chairperson, any Party may request that such matter
be referred to one of the remaining members of the pool of individuals selected
to act as chairpersons under Article 323(1) of this Agreement. Her or his name
shall be drawn by lot, in the presence of the Parties, by the chair of the
Trade Committee, or the chair's delegate. The decision by this person on the
need to replace the chairperson shall be final.         
c)       If this person decides that
the original chairperson does not comply with the requirements of the Code of
Conduct, she or he shall select a new chairperson by lot among the remaining
pool of individuals referred to under Article 323(1) of the Agreement who may act as chairpersons. This selection of the
new chairperson shall be done in the presence of the Parties and within
five days of the date of the submission of the request referred to in this
paragraph.

20.         The arbitration panel
proceedings shall be suspended for the period taken to carry out the procedures
provided for in paragraphs 16, 17, 18 and 19.

HEARINGS

21.         The chairperson shall fix
the date and time of the hearing in consultation with the Parties and the other
members of the arbitration panel, and confirm this in writing to the Parties.
This information shall also be made publicly available by the Party in charge of
the logistical administration of the proceedings unless the hearing is closed
to the public. Unless the Parties disagree, the arbitration panel may decide
not to convene a hearing.

22.         Unless the Parties agree
otherwise, the hearing shall be held in Brussels if the complaining Party is
Ukraine and in Kyiv if the complaining Party is the European Union.

23.         The arbitration panel may
convene additional hearings if the Parties so agree.

24.         All arbitrators shall be
present during the entirety of any hearing.

25.         The following persons may
attend the hearing, irrespective of whether the hearing is closed to the public
or not:

(a)     representatives of the Parties;

(b)     advisers to the Parties;

(c)     administrative staff, interpreters,
translators and court reporters; and

(d)     arbitrators’ assistants.

Only the representatives and advisers of the
Parties may address the arbitration panel.

26.         No later than five days
before the date of a hearing, each Party shall deliver to the arbitration panel
a list of the names of persons who will make oral arguments at the hearing on
behalf of that Party and of other representatives or advisers who will be
attending the hearing.

27.         The hearings of the
arbitration panels shall be open to the public, unless the Parties decide that
the hearings shall be partially or completely closed to the public. However the
arbitration panel shall meet in closed session when the submission and
arguments of a Party contain confidential information.

28.         The arbitration panel shall
conduct the hearing in the following manner, ensuring that the complaining
Party and the Party complained against are afforded equal time:

Argument

(a)     argument of the complaining Party

(b)     argument of the Party complained
against

Rebuttal Argument

(a)     argument of the complaining Party

(b)     counter-reply of the Party complained
against

29.         The arbitration panel may
direct questions to either Party at any time during the hearing.

30.         The arbitration panel shall
arrange for a transcript of each hearing to be prepared and delivered as soon
as possible to the Parties.

31.         Each Party may deliver a
supplementary written submission concerning any matter that arose during the
hearing within 10 days of the date of the hearing.

QUESTIONS
IN WRITING

32.         The arbitration panel may
at any time during the proceedings address questions in writing to one or both
Parties. Each of the Parties shall receive a copy of any questions put by the
arbitration panel.

33.         A Party shall provide a
copy of its written response to the arbitration panel’s questions to the other
Party. Each Party shall be given the opportunity to provide written comments on
the other Party’s reply within five days of the date of delivery.

CONFIDENTIALITY

34.         The Parties and their
advisers shall maintain the confidentiality of the arbitration panel hearings
where the hearings are held in closed session, in accordance with paragraph 27.
Each Party and its advisers shall treat as confidential any information
submitted by the other Party to the arbitration panel which that Party has designated
as confidential. Where a Party submits a confidential version of its written
submissions to the arbitration panel, it shall also, upon request of the other
Party, provide a non-confidential summary of the information contained in its
submissions that could be disclosed to the public no later than 15 days after
the date of either the request or the submission, whichever is later. Nothing
in these rules shall preclude a Party from disclosing statements of its own
positions to the public to the extent that they do not contain confidential
information.

EX
PARTE CONTACTS

35.         The arbitration panel shall
not meet or contact a Party in the absence of the other Party.

36.         No member of the
arbitration panel may discuss any aspect of the subject matter of the proceedings
with one Party or both Parties in the absence of the other arbitrators.

AMICUS CURIAE SUBMISSIONS

37.         Unless the Parties agree
otherwise within three days of the date of the establishment of the arbitration
panel, the arbitration panel may receive unsolicited written submissions from
interested natural or legal persons established in the territories of the
Parties, provided that they are made within 30 days of the date of the
establishment of the arbitration panel, that they are concise, including any
annexes, and that they are directly relevant to the factual and legal issues
under consideration by the arbitration panel. The arbitration panel may decide
to impose a page limit on such submissions.

38.         The submission shall
contain a description of the person making the submission, whether natural or
legal, including its place of establishment, the nature of its activities and
the source of its financing, and specify the nature of the interest that the
person has in the arbitration proceeding.

39.         The arbitration panel shall
list in its ruling all the submissions it has received that conform to the
above rules. The arbitration panel shall not be obliged to address in its
ruling the factual or legal arguments made in such submissions. Any submission obtained
by the arbitration panel under this rule shall be submitted to the Parties for
their comments.

URGENT CASES

40.         In cases of urgency
referred to in Article 310(2) of the Agreement, the arbitration panel shall
adjust the time limits referred to in these rules as appropriate.

TRANSLATION AND INTERPRETATION

41.         During the consultations
referred to in Article 305 of the Agreement, and no later than the meeting
referred to in paragraph 8(b) of these Rules of Procedure, the Parties shall
endeavour to agree on a common working language for the proceedings before the
arbitration panel.

42.         If the Parties are unable
to agree on a common working language, each Party shall expeditiously arrange
for and bear the costs of the translation of its written submissions into the
language chosen by the other Party and the Party complained against shall
arrange for the interpretation of oral submissions into the languages chosen by
the Parties.

43.         Arbitration panel rulings
shall be notified in the language or languages chosen by the Parties.

44.         The costs incurred for
translation of an arbitration ruling shall be borne equally by the Parties.

45.         Any Party may provide
comments on any translated version of a document drawn up in accordance with
these rules.

CALCULATION OF TIME-LIMITS

46.         Where, by reason of the
application of paragraph 7 of these Rules of Procedure, a Party receives a
document on a date other than the date on which this document is received by
the other Party, any period of time that is calculated on the basis of the date
of receipt of that document shall be calculated from the latter date of receipt
of that document.

OTHER PROCEDURES

47.         These Rules of Procedure
are also applicable to procedures established under Article 312(2), Article
313(2), Article 315(3) and Article 316(2) of the Agreement. However, the time‑limits
laid down in these Rules of Procedure shall be adjusted in line with the
special time‑limits provided for the adoption of a ruling by the
arbitration panel in those other procedures.

ANNEX
XXV

CODE OF CONDUCT FOR MEMBERS OF ARBITRATION
PANELS AND MEDIATORS

Definitions

1.           In this Code of Conduct:

(a)     “arbitrator” means a member of an
arbitration panel established under Article 307 of the Agreement;

(b)     "mediator" means a person
who conducts a mediation procedure in accordance with Chapter 15 (Mediation
Mechanism) of Title IV;

(c)     "candidate" means an
individual whose name is on the list of arbitrators referred to in Article 323
of the Agreement and who is under consideration for selection as a member of an
arbitration panel under Article 307 of the Agreement;

(d)     "assistant" means a person
who, under the terms of appointment of an arbitrator or mediator, conducts
research or provides assistance to the arbitrator or mediator;

(e)     "proceeding", unless
otherwise specified, means an arbitration panel or mediation proceeding under
the Agreement;

(f)      "staff", in respect of an
arbitrator or mediator, means persons under the direction and control of the
arbitrator or mediator, other than assistants.

Responsibilities
to the process

2.           Every candidate and
arbitrator or mediator shall avoid impropriety and the appearance of
impropriety, shall be independent and impartial, shall avoid direct and
indirect conflicts of interests and shall observe high standards of conduct so
that the integrity and impartiality of the dispute settlement mechanism is
preserved. Former candidates, arbitrators or mediators must comply with the
obligations established in paragraphs 15, 16, 17 and 18 of this Code of
Conduct.

Disclosure
obligations

3.           Prior to confirmation of
her or his selection as an arbitrator or as a mediator under the Agreement, a
candidate shall disclose any interest, relationship or matter that is likely to
affect his or her independence or impartiality or that might reasonably create
an appearance of impropriety or bias in the proceeding. To this end, a
candidate shall make all reasonable efforts to become aware of any such
interests, relationships and matters.

4.           A candidate, arbitrator or
mediator shall communicate matters concerning actual or potential violations of
this Code of Conduct only to the Trade Committee for consideration by the
Parties.

5.           Once selected, an
arbitrator or mediator shall continue to make all reasonable efforts to become
aware of any interests, relationships or matters referred to in paragraph 3 of
this Code of Conduct and shall disclose them. The disclosure obligation is a
continuing duty which requires an arbitrator or mediator to disclose any such
interests, relationships or matters that may arise during any stage of the
proceeding. The member shall disclose such interests, relationships or matters
by informing the Trade Committee, in writing, for consideration by the Parties.

Duties
of arbitrators or mediators

6.           Upon selection an arbitrator
or mediator shall perform her or his duties thoroughly and expeditiously
throughout the course of the proceeding, and with fairness and diligence.

7.           An arbitrator or mediator
shall consider only those issues raised in the proceeding and necessary for a
ruling and shall not delegate this duty to any other person.

8.           An arbitrator or mediator
shall take all appropriate steps to ensure that his or her assistants and staff
are aware of, and comply with, paragraphs 2, 3, 4, 5, 16, 17 and 18 of this Code
of Conduct.

9.           Without prejudice to
Article 330 of the Agreement, an arbitrator or mediator shall not engage in ex
parte contacts concerning the proceeding.

Independence
and impartiality of arbitrators or mediators

10.         An arbitrator or mediator
must be independent and impartial and avoid creating an appearance of
impropriety or bias and shall not be influenced by self-interest, outside
pressure, political considerations, public clamour, and loyalty to a Party or
fear of criticism.

11.         An arbitrator or mediator
shall not, directly or indirectly, incur any obligation or accept any benefit
that would in any way interfere, or appear to interfere, with the proper
performance of her or his duties.

12.         An arbitrator or mediator
may not use her or his position on the arbitration panel to advance any
personal or private interests and shall avoid actions that may create the
impression that others are in a special position to influence her or him.

13.         An arbitrator or mediator
may not allow financial, business, professional, family or social relationships
or responsibilities to influence her or his conduct or judgement.

14.         An arbitrator or mediator
must avoid entering into any relationship or acquiring any financial interest
that is likely to affect her or his impartiality or that might reasonably
create an appearance of impropriety or bias.

Obligations
of former arbitrators or mediators

15.         All former arbitrators or
mediators must avoid actions that may create the appearance that they were
biased in carrying out their duties or derived advantage from any decision or
ruling of the arbitration panel or from an advisory opinion.

Confidentiality

16.         No arbitrator or mediator
or former arbitrator or mediator shall at any time disclose or use any
non-public information concerning a proceeding or acquired during a proceeding
except for the purposes of that proceeding and shall not, in any case, disclose
or use any such information to gain personal advantage or advantage for others
or to adversely affect the interest of others.

17.         An arbitrator shall not
disclose an arbitration panel ruling or parts thereof prior to its publication
in accordance with the Agreement.

18.         An arbitrator or former
arbitrator shall not at any time disclose the deliberations of an arbitration
panel, or any arbitrator's views.

ANNEX

Protocol III: Protocol on a Framework
Agreement between the European Union and Ukraine on the General Principles for
the Participation of Ukraine in Union Programmes
ANNEX XII

to the
PROPOSAL FOR A COUNCIL DECISION

on the conclusion of the Association
Agreement between the European Union and its Member States, of the one part,
and Ukraine of the other part

PROTOCOL
III
ON A FRAMEWORK AGREEMENT
BETWEEN THE EUROPEAN UNION AND UKRAINE
ON THE GENERAL PRINCIPLES
FOR THE PARTICIPATION OF UKRAINE IN UNION PROGRAMMES

THE PARTIES HEREBY AGREE AS FOLLOWS:

ARTICLE 1

Ukraine shall be allowed to participate in
all current and future programmes of the Union opened to the participation of
Ukraine in accordance with the relevant provisions adopting those programmes.

ARTICLE 2

Ukraine shall contribute financially to the
general budget of the Union corresponding to the specific programmes in which
Ukraine participates.

ARTICLE 3

Ukraine's representatives shall be allowed
to take part, as observers and for the points which concern Ukraine, in the
management committees responsible for monitoring the programmes to which
Ukraine contributes financially.

ARTICLE 4

Projects and initiatives submitted by
participants from Ukraine shall, as far as possible, be subject to the same
conditions, rules and procedures pertaining to the programmes concerned as
applied to Member States.

ARTICLE 5

The specific terms and conditions regarding
the participation of Ukraine in each particular programme, in particular the
financial contribution payable and reporting and evaluation procedures, shall
be determined in a Memorandum of Understanding between the Commission and the
competent authorities of Ukraine on the basis of the criteria established by
the programmes concerned.

If Ukraine applies for external assistance
of the Union to participate in a given Union programme on the basis of
Article 3 of Regulation (EC) No 1638/2006 of the
European Parliament and of the Council of 24 October 2006
laying down general provisions establishing a European Neighbourhood and
Partnership Instrument or pursuant to any similar Regulation providing for
external assistance of the Union to Ukraine that may be adopted in the future,
the conditions governing the use by Ukraine of external assistance of the Union
shall be determined in a financing agreement, respecting in particular
Article 20 of Regulation (EC) No 1638/2006.

ARTICLE 6

In accordance with the Council Regulation
(EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial
Regulation applicable to the general budget of the European Communities,
each Memorandum of Understanding concluded pursuant to Article 5 shall
stipulate that financial control or audits or other
verifications, including administrative investigations, will be
carried out by, or under the authority of, the Commission, the European Court
of Auditors and the European Anti‑Fraud Office.

Detailed provisions shall be made on
financial control and auditing, administrative measures, penalties and recovery
enabling the Commission, the European Anti‑Fraud Office and the Court of
Auditors to be granted powers equivalent to their powers with regard to
beneficiaries or contractors established in the Union.

ARTICLE 7

This Protocol shall apply for the period
for which this Agreement is in force.

Either Party may denounce this Protocol by
written notification to the other Party. This Protocol shall terminate six
months after the date of such notification.

Termination of the Protocol following
denunciation by any of the Parties shall have no influence on the checks and
controls to be carried out in accordance with the provisions laid down in
Articles 5 and 6 where appropriate.

ARTICLE 8

No later than three years after the date of
entry into force of this Protocol, and every three years thereafter, both
Parties may review the implementation of this Protocol on the basis of the
actual participation of Ukraine in Union programmes.

ANNEX

Joint Declaration to the Association
Agreement between the European Union and its Member States, of the one part,
and Ukraine of the other
ANNEX XIII
to the

PROPOSAL FOR A COUNCIL DECISION

on the conclusion of the
Association Agreement between the European Union and its Member States, of the
one part, and Ukraine, of the other part, on behalf of the European Union

JOINT DECLARATION

The European Union (hereinafter referred to as the
"EU") recalls the obligations of those states that have established a
Customs Union with the EU to align their trade regime to the one of the EU, and
for certain of them, to conclude preferential agreements with countries having
preferential agreements with the EU.

In this context, the Parties note that Ukraine shall start negotiations with those states which

(a)          have established a Customs
Union with the EU, and

(b)          whose products do not
benefit from the tariff concessions under this Agreement,

with a view to concluding a bilateral
agreement establishing a free trade area in accordance with Article XXIV of the
GATT (thus covering substantially all trade). Ukraine shall start negotiations
as soon as possible with a view to having the above-mentioned agreement
entering into force as quickly as possible after the entry into force of this
Agreement.